If the Price Is Above the Equilibrium Price, Then There

question 437

Multiple Choice

If the price is above the equilibrium price, then there is a

• A) shortage, and market forces will operate to raise price.
• B) shortage, and market forces will operate to lower price.
• C) surplus, and market forces will operate to lower price.
• D) surplus, and market forces will operate to raise price.

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Definitions:

Highly Liquid

Assets that can be easily converted into cash with minimal impact on their value.

Direct Method

A method of presenting the operating activities section of the statement of cash flows that reports components of cash flows from operating activities as gross receipts and gross payments.

Accounts Receivable

Represents money owed to a company by its customers for goods or services delivered but not yet paid for.

Indirect Method

A way of calculating cash flows for operational activities by starting with net income and adjusting for non-cash transactions.