A Price Floor Above Equilibrium Will Cause a Larger Surplus

question 40

Multiple Choice

A price floor above equilibrium will cause a larger surplus when demand is _____ and supply is _____.

• A)elastic;inelastic
• B)inelastic;inelastic
• C)elastic;elastic
• D)perfectly inelastic;elastic

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Definitions:

Supply-Side Economists

Economists who believe that reducing tax rates and regulatory barriers to production are the best ways to increase economic growth.

Keynesians

Economists and theories following John Maynard Keynes, advocating for government intervention to manage economic cycles and promote full employment.

Economic Behaviorists

Researchers or economists who study the psychological, social, cognitive, and emotional factors influencing the economic decisions of individuals and institutions.

Monetarists

Economists of the view that changes in the money supply significantly affect the national output in the short term and have major impacts on the price level over extended durations.