Which of the Following Is an Example of the Law

question 244

Multiple Choice

Which of the following is an example of the law of demand?

• A)A decrease in the price of milk is followed by an increase in milk purchases.
• B)A decrease in the price of milk is followed by a decrease in milk purchases.
• C)An increase in the price of milk has no effect on the amount of milk purchased.
• D)The amount of milk purchased increases when the price is constant.

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Definitions:

Expected Price Level

This refers to the anticipation or forecast of future prices of goods and services in the economy, often influencing consumer and business decisions.

Foreign-Currency Exchange

The process of exchanging one currency for another, which involves determining the rate at which two currencies will be swapped.

Aggregate Demand

The total demand for all goods and services within a particular market or economy at various price levels, during a specified time period.

Price Level

A measure of the average prices of goods and services in an economy at a specific time, indicating the cost of living.