If Price Controls Are So Harmful, Why Would a Country

question 246

Multiple Choice

If price controls are so harmful, why would a country ever impose them?

• A) No one really knows.
• B) Price controls are usually thought to be beneficial.
• C) Politicians have strong incentives to respond to public opinion with price controls when prices increase sharply.
• D) People usually see the consequences of price controls but think they will be a good policy.

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Definitions:

Tradable Emissions Permit

A market-based instrument that provides economic incentives for reducing the emissions of pollutants.

Environmental Standard

Regulations and criteria set by authorities aimed at protecting the environment by controlling pollution levels and promoting sustainable practices.

Tradable Emissions Permits

Rights to emit a specific amount of a pollutant that can be bought and sold, used as a market-based approach to controlling pollution.

Supply and Demand

Supply and demand are economic principles describing the relationship between the quantity of a commodity available and the quantity that consumers are willing and able to purchase.