Assume That Both the Demand Curve and the Supply Curve

question 194

Multiple Choice

Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve.As a result

• A)both the equilibrium price and quantity of DVD players will decrease.
• B)the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
• C)the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease.
• D)the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.

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Definitions:

Bond Issue

The process of offering bonds for sale to investors as a way of borrowing money for long-term capital needs.

Interest Payable

The amount of interest expense that has been incurred but not yet paid by the company.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Interest Accrual

The process by which interest is accumulated over time on borrowed funds, to be paid at a later date.