-Refer to the Above Figure

question 237

Multiple Choice

-Refer to the above figure. Which of the following statements is TRUE?

• A) Panel A shows an increase in supply and Panel B shows a decrease in supply.
• B) Both Panels A and B show an increase in supply.
• C) Panel A shows a change in quantity supplied and Panel B shows a change in supply.
• D) Panel A shows a change in supply and Panel B shows a change in quantity supplied.

---

Definitions:

Multiplier

An economic factor that quantifies the impact of a change in investment, government spending, or other economic variables on the overall economy, often leading to a multiple increase in income or output.

Liquidity Preference Theory

A theory suggesting that people prefer to hold their wealth in liquid form for ease of transactions and as a precaution against uncertainty, influencing interest rates.

Demand for Money

The need or desire to hold money as opposed to investing or spending it, influenced by factors such as interest rates and economic stability.

Liquidity Preference

The desire of consumers and businesses to hold onto cash or easily convertible assets rather than making long-term investments or transactions.