When People Want More Goods and Services Than Are Available,the

question 74

Multiple Choice

When people want more goods and services than are available,the economy undergoes inflation.Which economic principle does this statement BEST represent?

• A)There are gains from trade.
• B)When markets don't achieve efficiency,government intervention can improve society's welfare.
• C)Overall spending sometimes gets out of line with the economy's productive capacity.
• D)Government policies can change spending.

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Definitions:

Interest Rate

The Interest Rate is the percentage at which interest is paid by borrowers for the use of money they borrow from a lender, commonly expressed as an annual percentage.

Aristotle

An ancient Greek philosopher and polymath who made significant contributions to numerous fields of study, including metaphysics, ethics, politics, and natural science.

Usury

Charging an excessively high or illegal rate of interest on borrowed money.

Joseph Schumpeter

An economist and political scientist known for his theories on economic innovation and the concept of "creative destruction" in capitalism.