Government Policies Such as Price Controls, Rent Controls, and Quantity

question 110

Multiple Choice

Government policies such as price controls, rent controls, and quantity restrictions have the effect of

• A) promoting the attainment of an unhindered market equilibrium.
• B) allowing quantity demanded to adjust to equality with aggregate supply.
• C) creating excess quantities demanded or excess quantities supplied.
• D) pushing prices to market clearing levels more rapidly than private market forces.

---

Definitions:

Phillips Curve

A concept suggesting an inverse relationship between the rate of inflation and the rate of unemployment within an economy.

Desired Expenditures

The amount of spending households, firms, and the government wish to make, usually influenced by economic conditions and policies.

Inflation

A persistent upsurge in the average cost of goods and services across an economy over time.

Unemployment

The situation when people who are willing to work at current wage rates cannot find jobs.