Assuming Conventional Supply and Demand Curves, Changes in the Determinants

question 163

Multiple Choice

Assuming conventional supply and demand curves, changes in the determinants of both supply and demand will generally

• A) alter both equilibrium price and quantity.
• B) alter equilibrium quantity but not equilibrium price.
• C) alter equilibrium price but not equilibrium quantity.
• D) have no effect on equilibrium price or quantity.

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Definitions:

Percentage Return

The increase or decrease in an investment, represented as a fraction of its initial cost and expressed as a percentage.

Preferred Stock

A type of stock that provides a fixed dividend that is paid before any dividends are paid to common stockholders and typically does not have voting rights.

Annual Dividend

The total dividends that a company pays to its shareholders out of its profits over the course of a year.

Nominal Rate

The stated interest rate of a financial instrument without adjusting for inflation.