In 2011, Floods Damaged a Large Portion of the Wheat

question 31

Multiple Choice

In 2011, floods damaged a large portion of the wheat crop in the prairie provinces.As a result of this, many farmers were not able to supply wheat to the market.As a result of the flooding, what would we expect to see in the market for wheat at the original equilibrium price

• A)a surplus of wheat.
• B)the quantity demanded equal to the quantity supplied.
• C)a shortage of wheat.
• D)an increase in the demand for wheat.

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Definitions:

Misery Index

An economic indicator created by adding the unemployment rate to the inflation rate, proposing to reflect the average citizen's financial discomfort.

Nominal Interest Rate

The rate of interest before adjusting for inflation, representing the face value of interest payments.

Inflation

The speed at which the overall price level for goods and services increases, causing a decline in the value of money.

Deflation

A decrease in the general price level of goods and services in an economy over a period of time.