Which of the Following Statements Is Correct? (Assume Demand Is

question 73

Multiple Choice

Which of the following statements is correct? (Assume demand is interacting with an upward sloping supply curve that does not shift.)

• A) If demand increases, then price will decrease.
• B) If demand decreases, then price will decrease.
• C) If price increases, then demand will decrease.
• D) If price decreases, then demand will decrease.

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Definitions:

Depository Institutions Deregulation and Monetary Control Act

A 1980 United States federal law that deregulated banks and other depository institutions to help improve the Federal Reserve's control over monetary policy.

Fed's Legal Reserve Requirements

The minimum reserves each bank must hold to customer deposits and notes, as mandated by the Federal Reserve.

Reserve Requirement

The amount of funds that a bank must hold in reserve against deposits made by its customers, a regulatory measure to ensure banks can meet withdrawal demands.

Deposit Multiplier

The ratio that measures the potential impact of a change in banking reserves on the money supply, indicating how much money banks can create with each dollar of reserves.