Question

Which of the following statements correctly describes the effects of price​ controls? A. They cause demand disruptions and could lead to widespread unemployment. B. Imposing these in inflationary times is economically destructive. C. Firms profitably sell goods and services at the prices set by the government. D. They cause the quantity supplied to exceed the quantity demanded. The cost to a business from frequently changing its prices due to high inflation rates is called ▼ opportunity cost seigniorage menu cost . Suppose the government prints and spends new currency. Which of the following statements are true in this​ case? ​(Check all that apply​). A. The citizens gain because their government has more money to spend. B. ​Printing/spending an enormous amount of new currency is socially beneficial. C. The citizens lose because the resulting inflation reduces the real value of the currency that they already hold. D. ​Printing/spending a modest amount of new currency is socially beneficial. Click to select your answer(s).

Answer 1

Option a and b

Option C

Step-by-step explanation:

A . In simple words, price control refers to the limits on the rates that can be paid for good and services produced in a marketplace that are set up and imposed by central govt.

The purpose behind these restrictions may derive from the need to preserve the availability of products even through skills shortages, and to further delay inflation, or, instead, to help ensure a guaranteed minimum income as well for manufacturers of such products or to seek to obtain a decent living wage.

B. In simple words, due to printing of new currency the supply of money ion the market would increase which will lead to inflation in the economy which will further lead to loss in value of the existing money in hand on the individuals.