Suggested Answers of BT2 Revision Package - ASKnLearn
Suggested Answers of BT2 Revision Package - ASKnLearn
Suggested Answers of BT2 Revision Package - ASKnLearn
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ConclusionSummarise and link to part (b)Thinking processIntroductionIntroduction- Explaincircumstanceswhere pricechanges can beconsideredexcessive.In the free market system, prices are determined by the interaction <strong>of</strong>demand and supply. However, in some cases excessive pricechanges can cause macroeconomic problems such as inflation orworsen the distribution <strong>of</strong> income in the economy. Thus thegovernment may opt to curb price increases through the use <strong>of</strong> aprice ceiling and excessive price decreases in the form <strong>of</strong> a pricefloor.