A price ceiling that sets the price of a good below market equilibrium will cause
a. an increase in quantity demanded of the good.
b. a decrease in quantity supplied of the good.
c. a shortage of the good.
d. all of the above.
D
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In spite of less-than-optimal currency area criteria at present in the Eurozone, some believe that the existence of a working currency union will result in:
A) an improvement in the criteria, as the union members are committed to work for more integration. B) a gradual deterioration of the union, as members seek benefits from having an autonomous monetary policy. C) tension and a power struggle over which will be the dominant economy in the union. D) more delay in implementing needed reforms.
If the inflation rate increases,
A) the real interest rate rises. B) real GDP growth increases. C) potential GDP increases. D) the nominal interest rate falls. E) the velocity of circulation increases.