Prices Communicate Information About Relative Availability of Products

question 141

Multiple Choice

Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that:

• A)​consumers are buying more corn than before.
• B)​corn is relatively more abundant than before.
• C)​corn is relatively less abundant than before.
• D)​consumers are stocking up on corn because of the predictions of a cold winter.

---

Definitions:

Monetary Policy

The management of a country's money supply and interest rates by its central bank to control inflation and stabilize the currency.

Amount Of Money

The total sum or figure represented in currency units, indicating the value or cost of an item, service, or financial obligation.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability and growth.

Credit Markets

Financial markets where borrowers can obtain funds from lenders, typically through the issuance of debt securities or loans.