Question

The government can prevent the shortages that accompany price ceilings by doing what? responses providing public goods providing public goods rationing rationing issuing bonds issuing bonds printing more money printing more money

How can the government prevent the shortages that accompany price ceilings?

a) Providing public goods
b) Rationing
c) Issuing bonds
d) Printing more money

Answer 1

To combat shortages from price ceilings, the government can engage in rationing, ensuring fair distribution of limited resources. Other options like providing public goods, issuing bonds, or printing money do not directly resolve the supply-demand imbalance created by price controls.

Step-by-step explanation:

To prevent the shortages caused by price ceilings, the government has a few options. The best approach is rationing, which directly addresses the shortage by allocating goods and services using criteria other than price. This can help ensure that everyone has access to some quantity of the scarce resource and prevents the excess demand that arises from artificially low prices. Providing public goods is not likely to solve the problem of shortages caused by price controls, as it does not handle the issue of too much demand for the good with a price ceiling. Issuing bonds is a method for the government to raise funds and has no direct impact on shortages of goods. Printing more money can exacerbate inflation and does not address the fundamental issue of more demand than supply.