If Equilibrium Is Present in a Market

question 168

Multiple Choice

If equilibrium is present in a market,

• A) there is generally either a shortage or a surplus.
• B) quantity demanded equals quantity supplied.
• C) quantity demanded exceeds quantity supplied.
• D) quantity supplied exceeds quantity demanded.

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Definitions:

Checking Deposits

Funds kept in a checking account at a financial institution, allowing for frequent withdrawals and deposits.

Deposit Expansion Multiplier

A ratio that determines the maximum amount by which the money supply can increase through the banking system's process of lending out deposits.

Required Reserve Ratio

A regulation that sets the minimum reserves each bank must hold to customer deposits and notes, effectively the same concept as the reserve-requirement ratio but stated differently.

Commercial Banks

Financial institutions that provide services such as accepting deposits, providing business loans, and offering basic investment products.