Economists Assume That When There Is a Change in Supply

question 123

Multiple Choice

Economists assume that when there is a change in supply and/or demand, the market clearing price returns to the equilibrium

• A) quickly.
• B) slowly.
• C) after a protracted negotiation process.
• D) after an adjustment period.

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Definitions:

Minneapolis

A major city in Minnesota, United States, known for its parks and lakes, as well as being a cultural and economic hub.

Central Bank

The main financial institution of a country, which regulates the money supply and interest rates and oversees the banking system.

1913

A year notable for several key historical events, including the ratification of the 16th Amendment to the U.S. Constitution, introducing the federal income tax.

Excess Reserves

Banks' reserves that exceed the minimum reserve requirements set by central banking authorities, indicating additional liquidity.