Are markets always in equilibrium?
a. Yes, they are always at the equilibrium point, or very close to it.
b. Yes, because few things tend to alter supply and demand.
c. No, but if there is no interference, they tend to move toward equilibrium.
d. No, they never "settle down" into a stable price and quantity.
e. Uncertain, economic theory has no answer to this question.
c
You might also like to view...
All of the following arguments are made against inflation targeting EXCEPT
A) rigid numerical targets would diminish the flexibility of monetary policy. B) the Fed would need to depend on future forecasts of inflation since monetary policy acts with a lag. C) the Fed has little influence on inflation. D) Holding the Fed accountable for low inflation may make it difficult for elected officials to monitor whether the Fed is supporting good overall economic policy.
What happens typically to a budget deficit during a recession?
a. It increases because of tax changes. b. It decreases because of spending decreases. c. It decreases automatically. d. It increases automatically.