Prohibiting price increases in situations of true scarcity
A. prevents the market mechanism from reallocating resources more efficiently.
B. discourages production.
C. may lead to extreme shortages of vitally needed products.
D. All of the responses are correct.
Answer: D
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For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated
a. Digital camera and memory stick b. 7Up and Mountain Dew c. Swimsuits and flip-flops d. Tylenol and cat food e. Photocopier and paper
Which of the following would contribute to a positive trade balance for a country?
A) having tourists visit the country B) importing textiles C) having foreign residents buy the government bonds of the country D) importing financial services
Which of the following would be included in the Consumer Price Index but not in the GDP Price Index?
a. The price of a used automobile b. The price of a dinner in a U.S. restaurant c. The price of a U.S.-manufactured stereo system d. The price of an IBM computer e. The price of a new Ford automobile
The relationship between the price level and the quantity of real GDP supplied is
a. full employment output. b. inflationary or recessionary gap. c. aggregate supply. d. supply-side equilibrium.