Suppose Demand Decreases and Supply Increases

question 355

Multiple Choice

Suppose demand decreases and supply increases. Which of the following will happen?

• A) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease.
• B) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
• C) Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
• D) Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease.
• E) The change in equilibrium price and quantity cannot be determined.

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Definitions:

Vault Cash

Physical currency and coins kept on hand by a bank or financial institution.

Capital

Human-made resources (such as tools, equipment, and structures) used to produce other goods and services. They enhance our ability to produce in the future.

Adjustable Rate Mortgages

A type of mortgage loan where the interest rate periodically adjusts based on a specific benchmark, affecting monthly payments.

Interest Rates

The cost of borrowing money or the return on savings, expressed as a percentage of the principal amount per period.