Table 4-A
Use the Following Information About Demand and Supply

question 132

Multiple Choice

Table 4-A
Use the following information about demand and supply schedules to answer the question.
$\begin{array}{lccc}\text { Price } & \mathbf{D}_{\mathbf{1}} & \mathbf{D}_{\mathbf{2}} & \mathbf{S}_{\mathbf{1}}&\mathbf{S}_{\mathbf{2}} \\\$ 12 & 5 & 9 & 19&14 \\\$ 10 & 8 & 12 & 17&12 \\\$ 8 & 11 & 15 & 15&10 \\\$ 6 & 13 & 18 & 13&8 \\\$ 4 & 16 & 21 & 11&6 \\\$ 2 & 18 & 24 & 9&4\end{array}$

-Refer to Table 4-A.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.If the government imposes a price ceiling of $10:

• A)a shortage of 4 units will result.
• B)a surplus of 4 units will result.
• C)a surplus of 10 units will result.
• D)a shortage of 10 units will result.
• E)the ceiling will have no impact on the quantity of Product A traded.

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Definitions:

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date.

International Fisher Effect

A theory stating that the difference in nominal interest rates between two countries is equal to the expected change in their exchange rates.

Inflation Rate

The pace at which prices for general goods and services escalate, causing a decline in the ability to purchase.

Treasury Bill

Short-term government securities with maturity periods of one year or less, sold at a discount from face value.