When There Is a Surplus of a Product in a Market

question 74

Multiple Choice

When there is a surplus of a product in a market the:

• A) price will rise.
• B) price must be above the equilibrium price.
• C) producers will expand output and sales will rise.
• D) price must be below the equilibrium price.

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Definitions:

Coupon Rate

The yearly interest rate a bond issuer pays to its holders, usually shown as a percent of the bond's nominal value.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which is not related to its market value.

Moody's

A credit rating agency that evaluates the creditworthiness of borrowers, ranging from governments to private enterprises, and assigns ratings that reflect the risk of default.

Junk Bonds

High-risk, high-yield bonds rated below investment grade by credit rating agencies, often issued by companies with poorer credit ratings.