If Both Supply and Demand Simultaneously Decrease

question 226

Multiple Choice

If both supply and demand simultaneously decrease

• A) the market clearing price definitely rises, and the equilibrium quantity definitely falls.
• B) the market clearing price definitely rises, and the effect on the equilibrium quantity is indeterminate.
• C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate.
• D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.

---

Definitions:

Population

The total number of people inhabiting a particular territory or geographic area.

GDP Deflator

An economic metric that converts the money-value measure of GDP to a measure of real GDP by accounting for inflation or deflation.

GDP Deflator

A measure that reflects the prices of all goods and services produced domestically, accounting for inflation within a country's economy.

Base Year

A reference year against which economic growth, price changes, or other data is compared in indexes or other statistical measures.