Refer to the Figure Below: If Price Is $8

question 73

Multiple Choice

Refer to the figure below: If price is $8,

• A)there will be a surplus of 150 units.
• B)there will be a shortage of 150 units.
• C)price will fall.
• D)shortage of 75 units.
• E)surplus of 75 units.

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Definitions:

Money Supply

Refers to the total amount of money—cash, coins, and balances in bank accounts—available in an economy at a specific time.

Classical Macroeconomic Theory

An economic theory that posits that markets function efficiently and that full employment is achieved when economies operate at a state of equilibrium without government intervention.

Nominal Variables

Variables that are measured in terms of money and have not been adjusted for inflation, as opposed to real variables which are inflation-adjusted.

Money Supply

The total amount of money in circulation or in existence within a country's economy.