A Surplus Exists in the Market When

question 37

Multiple Choice

A surplus exists in the market when

• A)supply and demand are equal.
• B)the quantity demanded is less than the quantity supplied.
• C)the supply curve has shifted to the left.
• D)the equilibrium price is too low.
• E)the quantity demanded exceeds the quantity supplied.

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Definitions:

Market Rate

The market rate, often related to interest or exchange rates, is the prevailing rate determined by supply and demand dynamics in the open market.

Risk-free Rate

The theoretical rate of return on an investment with zero risk of financial loss, often represented by the yield on government securities.

Risk-free Asset

An investment that is expected to return its full original value along with a specified interest rate with virtually no risk of financial loss.