Price Tends to Be in Equilibrium Where Supply and Demand

question 119

Multiple Choice

Price tends to be in equilibrium where supply and demand intersect because when quantity supplied:

• A) equals quantity demanded, prices don't change.
• B) exceeds quantity demanded, prices have a tendency to rise.
• C) is less than quantity demanded, prices tend to fall.
• D) equals quantity demanded, prices will fall.

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Definitions:

Outstanding Checks

Refers to checks that have been written and recorded in the accounting records but have not yet cleared the bank.

NSF Check

A check that a bank returns without honoring because the account on which it was drawn does not have sufficient funds.

Outstanding Checks

Outstanding checks refer to checks that have been written and recorded in the paying entity's ledger but not yet cashed or cleared by the recipient.

Checks Cleared

The process where bank checks are verified and funds are transferred from the check writer's account to the recipient's account.