If There Is a Surplus of Loanable Funds,then

question 91

Multiple Choice

If there is a surplus of loanable funds,then

• A)the quantity demanded is greater than the quantity supplied and the interest rate will rise.
• B)the quantity demanded is greater than the quantity supplied and the interest rate will fall.
• C)the quantity supplied is greater than the quantity demanded and the interest rate will rise.
• D)the quantity supplied is greater than the quantity demanded and the interest rate will fall.

Explain the adjustment process to equilibrium in the product market and the role of prices in this process.

Understand the concept of equilibrium price and how it is determined by the intersection of supply and demand curves.

Explain how changes in demand and supply influence market equilibrium price and quantity.

Identify the effects of government interventions, such as taxes, on market prices and quantities.

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Definitions:

Ration Coupons

Documents or certificates that allow the holder to purchase a certain amount of a product, used especially during shortages to ensure fair distribution.

Government-mandated Increase

A requirement imposed by the government that results in a rise, often relating to wages, prices, or taxes.

Demand and Supply Curves

Graphs used in economics to illustrate the relationship between how much of a good or service is desired by buyers (demand) and how much is available from suppliers (supply) at various prices.

Product Market

A market in which products are sold by firms and bought by households.