If the Market for Twinkies Is in Equilibrium, Then

question 330

Multiple Choice

If the market for Twinkies is in equilibrium, then

• A) Twinkies must be a normal good.
• B) producers would like to sell more at the current price.
• C) consumers would like to buy more at the current price.
• D) the quantity supplied equals the quantity demanded.

---

Definitions:

Inflation

The pace of escalation in the overall price environment for goods and services, lessening the ability to procure.

Real Exchange Rate

A measure of the value of one country's currency compared to another's, adjusted for inflation, reflecting the purchasing power of the currencies for goods and services.

Net Exports

The difference between a country's total value of exports and its total value of imports, indicating whether it has a trade surplus or deficit.

Purchasing-power Parity

A theory in economics that states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.