Reference: Ref 4-8 (Figure: Demand, Supply Shifts) in the Figure

question 61

Multiple Choice

Reference: Ref 4-8 (Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. Resource prices in this market increase; at the same time, the consumer population declines as migration causes an outflow of population to other regions. What happens to the supply curve and/or demand curve?

• A) S1 shifts to S2 but then shifts back to S1. D1 remains at D1.
• B) S1 shifts to S3 and D1 shifts to D2.
• C) S1 shifts to S2 and D1 shifts to D3.
• D) S1 shifts to S2 and D1 shifts to D2.

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Definitions:

Bank

A financial institution licensed to receive deposits and make loans, and offer other financial services, such as wealth management and currency exchange.

Float Balance

The amount of money within a financial system that is briefly counted twice due to time gaps in registering a deposit or withdrawal, often seen in the banking system.

Ledger Balance

The balance of a bank account at the start of each day, including all deposits and withdrawals that have been posted to the account.

Miller-Orr Model

A model used to manage cash balances by setting upper and lower limits on cash reserves, triggering transfers to optimize interest and liquidity.