If Both the Supply and Demand Curves Shift to the Right

question 18

Multiple Choice

If both the supply and demand curves shift to the right, it can be concluded that there will be:

• A) a decrease in the equilibrium quantity sold
• B) a decrease in the equilibrium price
• C) an increase in the equilibrium quantity sold
• D) an increase in the equilibrium price

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Definitions:

Inflation

An increase in the overall level of prices in the economy

Output

The amount of goods or services produced by a firm, industry, or economy over a given period.

Sacrifice Ratio

A measure of the economic cost of reducing inflation, calculated as the percentage of annual output lost per one percentage point reduction in inflation.

Inflation

A general increase in prices and fall in the purchasing value of money.