What happens when the supply of a nonperishable good is greater than what consumers want to buy?
a. the good is discarded
b. the good becomes a luxury and the price rises
c. either the good is saved for later sale or the price is raised
d. either the good remains unsold or the price drops
Ans: d. either the good remains unsold or the price drops
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The four main policy tools the Federal Reserve System uses to influence the interest rate are setting
A) credit easing, the discount rate, setting tax rates, and setting the required reserve ratio. B) the discount rate, open market operations, extraordinary crisis measures and setting the required reserve ratio. C) quantitative easing, open market operations, setting tax rates, and setting the required reserve ratio. D) quantitative easing, market interest rate and the discount rate, as well as open market operations. E) the prime rate, open market operations, extraordinary crisis management and setting the excess reserve ratio.
What does the upper half of the diagram represent—the part marked 1?
a. the product market b. the factor market c. the government flow of resources d. the flow of income