If price controls are initiated,we would expect that
A)unemployment will rise in the short-run.
B)the short-run rate of inflation will be unchanged.
C)the rate of inflation will accelerate in the short-run.
D)the rate of inflation will fall in the short-run.

Question

Quizplus · Accepted Answer

Price controls are typically put in place to lower prices, which can result in a decrease in the rate of inflation in the short-run. However, there may be unintended consequences, such as shortages or reduced quality of goods, which can lead to higher prices and inflation in the long run. In terms of employment, price controls could potentially lead to reduced production and layoffs, but this would not necessarily happen in all cases.

If Price Controls Are Initiated,we Would Expect That