If Both Buyers and Sellers Expect the Price of a Commodity

question 18

Multiple Choice

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that equilibrium price will ________ and equilibrium quantity will ________.

• A) fall;change very little
• B) rise;change very little
• C) change very little;fall
• D) change very little;rise
• E) be the same;be the same

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Definitions:

Temporary/Permanent

Categories used to distinguish assets, liabilities, and equity items based on their duration in financial statements; temporary items fluctuate regularly while permanent items typically remain constant over time.

Principal

The original sum of money borrowed in a loan, or the amount of the investment that is actually made.

Total Liabilities

The sum of all debts and financial obligations a company owes to outside parties, including loans, accounts payable, and bonds payable.

Owner's Equity

Indicates the total net worth of a company attributable to the owner or shareholders, reflecting the equity capital and retained earnings.