Which of the Following Statements Is TRUE

question 227

Multiple Choice

Which of the following statements is TRUE?

• A) An increase in the price of gasoline will increase the supply of gasoline.
• B) An increase in the price of gasoline will increase the quantity demanded of gasoline.
• C) An increase in the price of gasoline will increase the quantity supplied of gasoline.
• D) An increase in the price of gasoline will decrease the demand for gasoline.

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Definitions:

Liquidity Preference Theory

is the hypothesis that investors prefer to have liquid rather than illiquid assets and will demand higher yields for longer-term securities that are less liquid.

Aggregate Demand Curve

A graph showing the total demand for goods and services within an economy at different price levels.

Aggregate Demand

The total demand for all goods and services within an economy at various price levels, over a specific time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time.