Why Does Equilibrium in the Market for a Traded Good

question 53

Multiple Choice

Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?

• A)Because equilibrium occurs where demand equals supply.
• B)Because markets are never in equilibrium.
• C)Because some of the good is imported or exported.
• D)Because there are several demand curves, and the market can't choose between them.
• E)All of the above are correct.

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Definitions:

Paid-In Capital

The total amount of money shareholders have invested in the company through the purchase of its stock.

Par

The face value of a bond or other financial instrument, often used in reference to its original issue value.

Stated Value

A value that is assigned to a share of stock by the company's board of directors, not based on market value, but used for accounting and reporting purposes.

Excess of Par

The amount by which a security's sale or issue price exceeds its par value.