A Binding Price Ceiling Results In

question 71

Multiple Choice

A binding price ceiling results in:

• A)inefficiency resulting from overproduction of the good.
• B)inefficiency because transactions are held below the equilibrium quantity.
• C)a decrease in wasted resources,as consumers find such goods more easily.
• D)surpluses in the market,which eventually lead to inefficient production costs.

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Definitions:

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold.

Managed Float

A currency exchange rate policy where a currency's value is allowed to fluctuate in response to foreign exchange market mechanisms, but the central bank may intervene to stabilize the currency if necessary.

Managed Floating

An exchange rate system where a country's currency value is allowed to fluctuate in response to foreign-exchange market mechanisms, but the central bank can intervene to prevent extreme fluctuations.