Price Ceilings Do Not Have Much Effect

question 262

Multiple Choice

Price ceilings do not have much effect:

• A) in times of high inflation.
• B) ever.
• C) when market prices are at or below the ceiling.
• D) in nonmarket economies.

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Definitions:

Recoverable Amount

The higher of an asset's fair value less costs to sell and its value in use. It's the estimated amount an entity can obtain from an asset's use or sale, covering its carrying amount.

Carrying Amount

The value at which an asset is recognized on the balance sheet after deducting accumulated depreciation and impairment charges.

Cost Method

An accounting method used to record investments in which the investment is recorded at cost and dividends are recognized as income.

Dividends

Dividends are payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.