The market system automatically corrects a surplus condition in a competitive market by:
A. Raising the price of the commodity in question while increasing the quantity demanded
B. Raising the price of the commodity in question while decreasing the quantity demanded
C. Reducing the price of the commodity in question while increasing the quantity demanded
D. Reducing the price of the commodity in question while decreasing the quantity demanded
Answer: C. Reducing the price of the commodity in question while increasing the quantity demanded
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The idea that business fluctuations are primarily caused by factors affecting aggregate supply rather than aggregate demand is a central tenet of
A. efficiency wage theory. B. mainstream economics. C. real business cycle theory. D. monetarism.
Public goods are generally produced by
A. perfectly competitive industries. B. the government. C. freely functioning markets. D. monopolies.