Economics (AS & A Level) · Oct / Nov 2023 · Paper 33 · Question 15
9708Methods and effects of government intervention in markets
To control the cost of living, governments have sometimes imposed a maximum price on certain goods that is below the free market price. What is often an undesirable side effect of such a policy?
- Aaccelerating general inflation
- Ban increase in profits above normal profits
- Can increase in the stocks of unsold goods held by firms
- Dshortages of the good
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Correct answer: D. shortages of the good
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