Suppose That Supply for Some Good Increases and That Simultaneously

question 138

Multiple Choice

Suppose that supply for some good increases and that simultaneously the demand for the same good decreases.The result would be

• A)a decrease in P and an indeterminate change in Q.
• B)a decrease in Q and an indeterminate change in P.
• C)an increase in Q and a decrease in P.
• D)an increase in Q and an increase in P.
• E)no change in either P or Q.

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Definitions:

Domestic Macroeconomic Adjustments

Changes made within a country's economy to address macroeconomic issues such as inflation, unemployment, and economic growth.

Foreign-exchange Reserves

Assets held by a central bank in foreign currencies, which are used to back liabilities on their own issued currency as well as to influence monetary policy.

Pegged Exchange Rate

A currency system where a country's currency value is fixed or linked to another currency or a basket of currencies.