A Binding Price Ceiling

question 208

Multiple Choice

A binding price ceiling
i.causes a surplus.
ii.causes a shortage.
iii.is set at a price above the equilibrium price.
iv.is set at a price below the equilibrium price.

• A) (ii) only
• B) (iv) only
• C) (i) and (iii) only
• D) (ii) and (iv) only

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Definitions:

Borrowed

Describes money that has been taken from another party with the agreement that it will be repaid, typically with interest.

Daily Interest

Interest calculation method where the interest is accrued daily.

Savings Account

A bank account where money is kept so that it can earn interest over time, typically used for holding funds that are not needed for daily expenses.

Annual Simple Interest

Interest calculated once a year on the principal sum, without compounding.