Use the Following to Answer Questions

question 58

Multiple Choice

Use the following to answer questions
Figure: Supply and Demand for Shoes
-(Figure: Supply and Demand for Shoes) If the price of shoes is $20,then the market:

• A) is in equilibrium.
• B) is experiencing a shortage of shoes.
• C) is experiencing a surplus of shoes.
• D) There is not enough information to answer this question.

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Definitions:

Depression

An intense and extended period of economic recession marked by a substantial drop in Gross Domestic Product (GDP), elevated rates of joblessness, and a decrease in the general price level of goods and services.

Aggregate Demand

The aggregate requirement for all products and services within an economy, measured at a specific overall price level and during a certain time frame.

U.S. Government Securities

Financial instruments issued by the U.S. Department of the Treasury or other federal government agencies to finance federal spending, including Treasury bonds, notes, and bills.

Bank Reserves

The amounts of funds that a bank holds in its reserve account with the central bank or as cash in vault, to meet any sudden withdrawals.