The Figure Below Shows the Demand (D) and Supply (S)

question 25

Multiple Choice

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4

-A commodity money standard exists when exchange rates are:

• A)artificially pegged to the price of oil.
• B)fixed in terms of gold, thus creating flexible exchange rates between countries.
• C)fixed in terms of gold, thus creating fixed exchange rates between countries.
• D)allowed to fluctuate based on the values of different currencies.
• E)fixed, based on the values of different currencies, in terms of some commodity.

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Definitions:

Aggregate Supply

The total supply of goods and services that firms in an economy are willing to sell at a given price level in a given time period.

Investment

The purchase of goods that are not consumed today but are used in the future to create wealth, including assets like property, stocks, or bonds.

Aggregate Demand Curve

Curve showing planned purchase rates for all goods and services in the economy at various price levels.

Price Level

An index that measures the average price of goods and services in an economy at a specific time.