Exhibit 4-3  Supply and Demand Curves Initially the Market Shown

question 129

Multiple Choice

Exhibit 4-3  Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂) . Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄) . This change is stated as a(n) :

• A) increase in supply and an increase in demand.
• B) increase in supply and a decrease in demand.
• C) decrease in demand and a decrease in supply.
• D) increase in demand with supply held constant at S₂.

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Definitions:

Issuance of Bond

The process through which a bond is created and sold to investors, thus raising capital for the issuer.

Financing Activities

Transactions that result in changes to the size and composition of the equity capital or borrowings of an entity.

Issued Common Stock

Equity shares that have been distributed to shareholders by the company.

Cash Dividends

are payments made by a corporation to its shareholders from profits in the form of cash, reflecting a portion of the corporate earnings being distributed.