Alabama Real Estate Practice Exam

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Master your Alabama real estate exam with our comprehensive practice test. Tailored feedback, expert tips, and up-to-date questions to ensure your success!

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What causes price changes in the market?

Political factors
Economic downturns
Supply and demand
Environmental changes

The correct answer is: Supply and demand

Price changes in the market are mainly caused by the forces of supply and demand. This means that when there is an imbalance between the quantity of goods or services being produced (supply) and the desire or ability of consumers to purchase them (demand), prices will change accordingly. Option A, political factors, may play a role in certain industries or during political instability but it is not the main driver of price changes in the overall market. Option B, economic downturns, can also affect prices but they are a result of the change in supply and demand. Option D, environmental changes, may influence prices in industries that heavily rely on natural resources but it is not a direct cause of market price changes.