If the Price of an Item Can Freely Adjust, a Market

question 285

Multiple Choice

If the price of an item can freely adjust, a market will

• A) always move towards equilibrium.
• B) always have an excess quantity demanded.
• C) always have an excess quantity supplied.
• D) never move towards equilibrium because prices are always increasing.

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Definitions:

Cash Today

Cash Today refers to the availability of funds or capital that can be immediately used or invested, as opposed to future earnings or receivables.

Rate of Return

The augmentation or diminution in an investment's valuation across a specified timeframe, articulated as a fraction of the initial investment expense.

Present Value

The present financial worth of expecting a sum of money or cash flows in the future, calculated by a certain rate of return.

Cash Flows

The cumulative amount of money circulating in and exiting a business, markedly influencing its liquidity position.