An Increase in Demand and a Decrease in Supply Will

question 167

Multiple Choice

An increase in demand and a decrease in supply will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.

• A)decrease;decrease
• B)indeterminate change;increase
• C)indeterminate change;decrease
• D)increase;indeterminate change

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Definitions:

Purchasing Power

The real value of money in terms of the quantity of goods or services that one unit of money can buy.

Disinvestment

The process of selling off a portion of assets or withdrawal of investment capital from stocks, bonds, or businesses, often indicating a strategic or economic decision.

Public Sector

The part of the economy that is controlled by the government, encompassing public services and enterprises, including education, healthcare, and law enforcement.

Hyperinflation

An extremely high and typically accelerating inflation rate, often resulting in rapidly eroding currency values and creating economic instability.