"Supply Creates Its Own Demand" Implies That

question 14

Multiple Choice

"Supply creates its own demand" implies that

• A) the very act of supplying a particular level of goods and services necessarily equals the level of goods and services demanded.
• B) the very act of demanding a particular level of goods and services necessarily equals the level of goods and services supplied.
• C) the government will buy up any surplus of goods and services in a country to avoid economic problems.
• D) the very act of supplying a particular level of goods and services will not necessarily equal the level of goods and services demanded.

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Definitions:

Interest Rate Parity Theory

Interest Rate Parity Theory is an economic theory which suggests that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Exchange Rates

The rate at which one currency can be exchanged for another, influencing international trade and capital flow between countries.

Equilibrium

In economics and finance, a state where supply equals demand, and market forces are in balance, resulting in stable prices.

WEBS Portfolios

WEBS Portfolios, originally known as World Equity Benchmark Shares, are exchange-traded funds that track international stock market indexes.