The Quantity Sold in a Market Will Decrease If the Government

question 25

Multiple Choice

The quantity sold in a market will decrease if the government

• A)decreases a binding price floor in that market.
• B)increases a binding price ceiling in that market.
• C)increases a tax on the good sold in that market.
• D)All of the above are correct.

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Definitions:

Discretionary Influence

The ability to make decisions or take actions based on personal judgment rather than fixed rules.

Public Borrowing

The process by which a government finances its expenditure by raising loans through the issuance of securities or borrowing from financial institutions.

Federal Deficit

The fiscal year difference when the U.S. Government's expenditures exceed its revenues, necessitating borrowing to cover the gap.

Real GDP

The measure of a country's economic output adjusted for inflation, reflecting the true value of goods and services produced.