When the Demand for a Good Decreases,its Equilibrium Price ________

question 182

Multiple Choice

When the demand for a good decreases,its equilibrium price ________ and equilibrium quantity ________.

• A) falls; decreases
• B) falls; increases
• C) rises; decreases
• D) rises; increases
• E) falls; does not change

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Definitions:

Leverage Ratio

A financial metric used to assess a company's ability to meet its financial obligations, calculated as the ratio of its total debt to its equity, assets, or other benchmarks.

Bank Capital

The financial resources held by a bank that acts as a cushion against potential losses, consisting of equity, retained earnings, and other reserves.

Assets

Resources owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans received from the central bank's discount window.