An Increase in Price and Decrease in Quantity Are Consistent

question 105

Multiple Choice

An increase in price and decrease in quantity are consistent with a:

• A) leftward shift in demand and no shift in supply.
• B) leftward shift in supply and no shift in demand.
• C) rightward shift in supply and a rightward shift in demand.
• D) rightward shift in supply and a leftward shift in demand.

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Definitions:

Monetary Tool

Instruments used by central banks to control the supply of money in the economy, impacting interest rates and overall economic activity.

Open-Market Operations

These are actions, like buying or selling government bonds, undertaken by central banks to control the money supply and interest rates.

Price-Earnings Ratios

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

S&P 500 Index

An American stock market index based on the market capitalizations of 500 large companies listed on stock exchanges in the United States.