Asked by Eunice Gwendolyn on Jun 03, 2024
Verified
Which of these does not interfere with the price mechanism?
A) Usury laws
B) Minimum wage laws
C) Farm price supports,or price floors
D) The law of supply and demand
Price Mechanism
The system by which the forces of supply and demand determine the prices of goods and services and allocate resources in an economy.
Usury Laws
Regulations governing the amount of interest that can be charged on a loan, intended to prevent lenders from imposing excessively high interest rates.
- Identify the consequences of external regulations on the functionality of price mechanisms.
Verified Answer
ZK
Zybrea KnightJun 08, 2024
Final Answer :
D
Explanation :
The law of supply and demand, also known as market forces, is the basis for the operation of the price mechanism. It determines the price point at which buyers and sellers are willing to exchange goods and services. The other options listed, such as usury laws, minimum wage laws, and price floors, interfere with the price mechanism by imposing restrictions or minimums that may create distortions in the market.
Learning Objectives
- Identify the consequences of external regulations on the functionality of price mechanisms.