If There Is Initially an

question 9

Multiple Choice

If there is initially an

• A) excess demand for money, the interest rate will fall, and the supply of money will rise.
• B) excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise.
• C) excess supply of money, the interest rate will rise, and if there is initially an excess demand, it will fall.
• D) excess supply of money, the interest rate will fall, and if there is also an excess demand, it will fall rapidly.
• E) excess supply of money, the interest rate will rise, and if there is also an excess demand, it will rise rapidly.

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Definitions:

Incidence of a Tax

The incidence of a tax refers to the distribution of the tax's economic burden among different stakeholders, such as consumers and producers.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in price.

Price Ceiling

A legally imposed maximum price on goods or services, intended to keep prices affordable for consumers.

Shortage/Surplus

A surplus is the opposite of a shortage, occurring when the supply of a product or service exceeds its demand in a market.