The Law of Demand Implies That If Nothing Else Changes

question 308

Multiple Choice

The law of demand implies that if nothing else changes, there is

• A) a positive relationship between the price of a good and the quantity demanded.
• B) a negative relationship between the price of a good and the quantity demanded.
• C) a linear relationship between price of a good and the quantity demanded.
• D) an exponential relationship between price of a good and the quantity demanded.

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Definitions:

Deposit Account

A deposit account is a bank account that allows the holder to deposit and withdraw money, often earning interest, including savings accounts, checking accounts, and other transaction accounts.

Liabilities

Financial obligations or debts that a company or individual owes to others, which must be paid back in the future.

Government Securities

Financial instruments issued by the government to borrow money from the public.

Excess Reserves

The amounts of cash banks hold in reserve over and above the regulatory requirements, which can influence their capacity for lending and overall liquidity in the economy.