When Will a Decrease in Supply Cause the Largest Increase

question 215

Multiple Choice

When will a decrease in supply cause the largest increase in price

• A)when both supply and demand are inelastic
• B)when both supply and demand are elastic
• C)when demand is elastic and supply is inelastic
• D)when demand is inelastic and supply is elastic

---

Definitions:

Capital Adequacy Ratio

A measure of a bank's capital, used to protect depositors and promote the stability and efficiency of financial systems by ensuring banks can absorb a reasonable amount of loss.

Loan Charge-Offs

Represents the amount of debt that a bank or lender determines cannot be collected after a debtor's default.

Long-Term Incentive

Incentive plans designed to improve employees' long-term performance and retention, typically including options, restricted stock, and performance plans.

Stock Options

Financial derivatives that give the holder the right but not the obligation to buy or sell shares of a stock at a specified price before a certain date.