Question

Which occurs during disequilibrium? check all that apply

Answer 1

Disequilibrium occurs in the stock market when the market price of any given stock is not at equilibrium. It often occurs when supply exceeds demand. In simple English, the company who issued the stock (or shares) has issued more shares that what stock brokers want to buy. So the price of per share will drop. Another example of disequilibrium occurs in the Currency market. The price of the US Dollar, as opposed to the Japanese Yen, is seen to be in equilibrium when there is equal supply and demand of each currency. Disequilibrium occurs when the one currency is in less demand than the other currency. This results in the price of one currency dropping lower than the price of the other currency