According to the Law of Demand, If the Price of Compact

question 46

Multiple Choice

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

• A)demand for compact disks would decrease.
• B)quantity demanded of compact disks would decrease.
• C)demand for compact disks would increase.
• D)quantity demanded of compact disks would not change.
• E)quantity demanded of compact disks would increase.

---

Definitions:

Interest Rates

The cost of borrowing money or the return on investment for savings, playing a central role in monetary policy and financial decision-making.

Money Demand Curve

A graphical representation showing the relationship between the quantity of money people want to hold and the interest rate, typically depicted as downward sloping.

Interest Rate

The percentage at which interest is charged or paid for the use of money over a period.

Quantity Theory of Money

An economic theory that suggests the general price level of goods and services is directly proportional to the amount of money in circulation.