Other Things Being Equal, Suppose That the Demand for Wheat

question 312

Multiple Choice

Other things being equal, suppose that the demand for wheat in constant quality units increases. The increase in demand will cause

• A) a surplus of wheat.
• B) a higher equilibrium price and higher equilibrium quantity of wheat.
• C) fall in the market clearing price of corn, a substitute for wheat.
• D) a higher equilibrium quantity, but a lower equilibrium price of wheat.

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Definitions:

International Gold Standard

The International Gold Standard was a monetary system in which the value of a country's currency was directly linked to a specific amount of gold, facilitating international trade and investment stability.

Balance of Payments

A summary of all transactions between residents of a country and the rest of the world over a specific period, including trade, investment, and financial transfers.

Exchange Rates

The value of one currency expressed in terms of another currency, determining how much foreign currency can be exchanged for a unit of domestic currency.

Gold Standard

A monetary system in which the standard economic unit of account is based on a fixed quantity of gold.