When a Country Imposes and Maintains Price Controls,inflation

question 39

Multiple Choice

When a country imposes and maintains price controls,inflation

• A) can never occur.
• B) will result in a general surplus of goods and services.
• C) is felt through long lines of people wanting to buy goods.
• D) has been legislated away.

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Definitions:

Direct Labor

The wages and expenses directly associated with the manufacturing of goods or provision of services, including the work of employees on the production line.

Variable Costs

Costs that vary in direct proportion to changes in levels of production or sales, such as raw materials and labor expenses.

Variable Costs

Costs that change in proportion to the level of production or sales activity, such as raw materials or direct labor.

Direct Proportion

A relationship between two variables where an increase in one results in a proportional increase in the other.