What Is a Price Ceiling

question 20

Essay

What is a price ceiling?

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Definitions:

Aggregate Supply

The total supply of goods and services produced within an economy at a given overall price level and in a given time period.

Money Supply

The total amount of money available in an economy at a particular time, including cash, deposits, and other liquid assets.

Sacrifice Ratio

The number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point.

Inflation

An increase in the overall level of prices in the economy