The Rationing Function of Price

question 12

Multiple Choice

The rationing function of price

• A)occurs when there is a movement of resources into or out of markets as a result of changes in the equilibrium market price.
• B)is also known as the guiding function of price.
• C)occurs when consumers change their tastes and preferences.
• D)occurs only when the market experiences severe shortages.

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Definitions:

National Currencies

The official money used in different countries, which serves as a medium of exchange within each nation and can have different forms such as notes and coins.

Buying Power

The amount of goods or services that can be purchased with a unit of currency.

Flexible Exchange Rates

A currency system where the price of a country's currency is set by the forex market based on supply and demand relative to other currencies.

Macroeconomic Instability

Occurs when an economy experiences high levels of volatility in factors such as inflation, growth rates, and unemployment, often leading to economic downturns.