If a Price Ceiling Results in a Shortage of the Good

question 106

Multiple Choice

If a price ceiling results in a shortage of the good, which of the following will NOT ration the demand:

• A)queuing mechanisms that get people to wait in long lines
• B)discrimination by the seller
• C)an increase in the price of the good
• D)none of the above

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Definitions:

Quantity Theory of Money

An economic theory that suggests the general price level of goods and services is directly proportional to the amount of money in circulation.

Velocity of Money

How quickly money moves from one exchange to another and the rate of usage of a currency unit within a designated time period.

Money Supply

The full measure of financial assets available within an economy at a specific juncture.

Dodd-Frank Act

The Dodd-Frank Act is comprehensive financial reform legislation enacted in 2010 in the United States, aimed at reducing risks in the financial system by increasing transparency and accountability.