A Recent Study Suggested That Moderate Wine Drinking May Actually

question 334

Multiple Choice

A recent study suggested that moderate wine drinking may actually benefit one's health. If this information leads to an increased demand for wine, we would expect

• A) both the price and quantity of wine sold to increase.
• B) both the price and quantity of wine sold to decrease.
• C) the price to decrease and the quantity of wine sold to increase.
• D) the price to increase and the quantity of wine sold to decrease.

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Definitions:

Government Intervention

The direct or indirect involvement of governmental actions in the market to influence the economy, correct market failures, or protect the public interest.

John Maynard Keynes

A British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments, emphasizing the importance of government intervention during economic downturns.

Milton Friedman

An influential American economist known for his strong belief in free-market capitalism and for winning the Nobel Prize in Economic Sciences in 1976.

Classical Economists

Economists from the 18th and 19th centuries who focused on the free market, advocating for limited government intervention.