Which of the Following Is True

question 78

Multiple Choice

Which of the following is true?

• A) If demand decreases, equilibrium price increases.
• B) If demand increases, equilibrium price decreases.
• C) If demand decreases, the demand curve shifts to the left.
• D) If demand decreases, the demand curve shifts to the right.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual rate.

Price of Money

Often refers to the interest rate, which is the cost charged by lenders for borrowing money or the rate of return expected by investors for lending money.

Time Preference

The economic principle that people prefer to receive goods or services sooner rather than later, reflecting the relative valuation placed on immediate versus future consumption.

Loanable Funds

The money available for borrowing in the financial markets, derived from savings and supplied to borrowers at an interest.