The market system automatically corrects a surplus condition in a competitive market by:
A. Raising the price of the commodity in question while increasing the quantity demanded
B. Raising the price of the commodity in question while decreasing the quantity demanded
C. Reducing the price of the commodity in question while increasing the quantity demanded
D. Reducing the price of the commodity in question while decreasing the quantity demanded
Answer: C. Reducing the price of the commodity in question while increasing the quantity demanded
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Which of the following most clearly indicates that fiscal policy is becoming more expansionary?
a. An increase in the budget deficit relative to GDP b. A reduction in the budget deficit relative to GDP c. An increase in the budget surplus relative to GDP d. An increase in the nominal (dollar) size of the budget deficit
Economic growth, as measured by increases in real GDP per-capita, exceeded 3% during the
A. 1980s. B. 1960s. C. 1990s. D. 2000s and 2010s.
"Supply creates its own demand" implies that
A. the very act of supplying a particular level of goods and services will not necessarily equal the level of goods and services demanded. B. the government will buy up any surplus of goods and services in a country to avoid economic problems. C. the very act of demanding a particular level of goods and services necessarily equals the level of goods and services supplied. D. the very act of supplying a particular level of goods and services necessarily equals the level of goods and services demanded.
Suppose that output in an economy is 1,000 units and the number of hours worked in the economy is 40. If the economy enters an expansion, which of the following combinations of output and hours worked would best reflect the expansion?
A. 1,200 units of output and 50 hours worked B. 1,800 units of output and 75 hours worked C. 1,000 units of output and 40 hours worked D. 1,600 units of output and 60 hours worked