When the Price of a Good Decreases

question 197

Multiple Choice

When the price of a good decreases:

• A) the quantity demanded increases.
• B) demand increases.
• C) the quantity supplied increases.
• D) supply increases.

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Definitions:

Consumption

The action or process of using goods and services for personal needs or desires, typically considered as a component of GDP.

Keynes

Refers to John Maynard Keynes, a British economist whose theories on government economic intervention to mitigate the adverse effects of recessions and depressions significantly influenced modern macroeconomics.

Aggregate Demand

The entire market demand for goods and services in an economic setting, priced collectively at a given level during a specified period.

Aggregate Supply

The aggregate amount of commodities and services scheduled for sale by businesses within a national economic framework during a designated timeframe.