Table 6-1 -Refer to Table 6-1.Suppose the Government Imposes a Price Ceiling

question 231

Multiple Choice

Table 6-1

-Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

• A) 0 units
• B) 2 units
• C) 8 units
• D) 10 units

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Definitions:

Multinational Corporations (MNCs)

Companies that operate in multiple countries beyond their home country.

Operations

The day-to-day activities involved in running a business to produce goods or services.

Direct Quote

A quote in foreign exchange markets that specifies the domestic currency price for one unit of a foreign currency.

Political Risk

The risk associated with changes in government policy which may negatively affect domestic and foreign businesses.