The Presence of a Price Control in a Market for a Good

question 130

Multiple Choice

The presence of a price control in a market for a good or service usually is an indication that

• A)an insufficient quantity of the good or service was being produced in that market to meet the public's need.
• B)the usual forces of supply and demand were not able to establish an equilibrium price in that market.
• C)policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
• D)policymakers correctly believed that price controls would generate no inequities of their own once imposed.

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Definitions:

Impostor Rule

A legal principle that holds a person pretending to be someone else liable for the deception if it results in harm or loss.

Negotiable Instrument

A written agreement promising to pay a designated sum of money, either upon request or at a fixed future date, with the obligor's name mentioned on the document.

Indorsement in Trust

A specification on a negotiable instrument where the indorsement indicates that the endorsee has trustee status, making them responsible for managing the instrument according to trust terms.

Bearer Instrument

A negotiable financial instrument that designates payment to whoever holds the instrument, not requiring ownership to be registered with the issuer.