The rationing function of prices refers to the:
A. tendency of supply and demand to shift in opposite directions.
B. fact that ration coupons are needed to alleviate wartime shortages of goods.
C. capacity of a competitive market to equalize quantity demanded and quantity supplied.
D. ability of the market system to generate an equitable distribution of income.
Answer: C
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If the cross elasticity of demand between goods A and B is positive
A) the demands for A and B are both price elastic. B) the demands for A and B are both price inelastic. C) A and B are complements. D) A and B are substitutes.
The Navigation Acts (1651 and later amendments) were part of the contemporary European commercial policy theory called
(a) laissez-faire. (b) mercantilism. (c) commercialism. (d) classical liberalism.
It is possible to have:
A. moral hazard without adverse selection present in a market. B. adverse selection present in a market without moral hazard. C. both moral hazard and adverse selection present in a market. D. All of these statements are true.
Keynesian economics focuses on the role of aggregate spending in determining the level of real GDP
a. True b. False Indicate whether the statement is true or false