If Producers Expect the Price of a Good to Rise

question 16

Multiple Choice

If producers expect the price of a good to rise in the near future, what will be the effect on supply?

• A) Current supply will increase.
• B) Current supply will decrease.
• C) Current supply will not be affected.
• D) Future supply will decrease.

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Definitions:

Fair Market Value

The price at which an asset would sell in the marketplace given willing, informed, and unpressured buyers and sellers.

Transfers

Movements of funds or resources from one account to another within an organization or between organizations.

Purchases Journal

A financial record keeping system that tracks all purchases of merchandise, supplies, or other assets on credit.

Cash Payments Journal

A cash payments journal is a financial journal that records all cash outflows or payments made by a business.