If there is excess demand in a market, then this suggests that:
A. the market price is above the equilibrium price.
B. there is an opportunity for mutually beneficial trades.
C. there is no way to help some people without harming others.
D. the market is in equilibrium.
Answer: B
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The Bretton Woods exchange rate system was replaced by a gold standard
Indicate whether the statement is true or false
Which of the following functions are performed by depository institutions?
I. They make long-term loans using short-term deposits, thereby creating liquidity. II. They efficiently gather funds from a large base of depositors. III. They concentrate risk. A) I only B) II only C) III only D) I and II
If the Fed purchases U.S. government securities in the open market, all of the following would occur EXCEPT
A) an expansion of the money supply. B) an increase in investment. C) a fall in bond prices. D) an increase in real Gross Domestic Product (GDP).
Explain how “herd behavior” affects the stock market and contributes to recession.
What will be an ideal response?