The Price Paid by Buyers in a Market Will Increase

question 93

Multiple Choice

The price paid by buyers in a market will increase if the government

• A)decreases a binding price floor in that market.
• B)increases a binding price ceiling in that market.
• C)decreases a tax on the good sold in that market.
• D)imposes a binding price ceiling in that market.

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Definitions:

Discount Rate

The interest rate charged by central banks on loans they give to commercial banks.

Present Values

The present equivalent of a future money sum or cash flow series, calculated using a particular rate of return.

Student Loans

Financial borrowings aimed at financing higher education expenses, subject to repayment with interest.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, usually expressed as a percentage of the principal.