Question

When do shortages occur?

a. when the United States imports more than it exports

b. when many people are unemployed

c. when interest rates go up

d. when people have trouble supplying the goods and services at current prices

Answer 1

Among the options given below,the correct answer is option D.

when people have trouble supplying the goods and services at current prices.

Explanation: Shortage is a economical condition where the demand of a goods or service more than the supply. There are many reasons behind occurring shortage. Among the causes one of the major cause is when the people have trouble supplying the goods and services at current price.

For example, if a clothing company gives the 40% sales on a attractive product ,people will try to buy this clothing product. But when the number of customer will exceed the number of the product available for the discount,will make a shortage. Because the sellers will not be able to supply more products on the same price.

So a shortage will occur in the market.

Answer 2

D

Step-by-step explanation:

Supply increases when imports exceed exports. In any event, there is no shortage. A is incorrect.

When unemployment increases, the ability to buy goods and services decrease. The supply increases. It does not decrease. B is incorrect.

When interest rates go up, the amount of free money decreases. Therefore inventories go up. Bad news. There are not shortages because of increases in interest rates. C is wrong.

D is the answer. If there is no profit in goods and services, they will stop being offered. Shortages will occur.