If Both the Demand Curve and the Supply Curve Shift

question 140

Multiple Choice

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the

• A) market clearing price will increase.
• B) market clearing price will decrease.
• C) equilibrium quantity will increase.
• D) equilibrium quantity will decrease.

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Definitions:

EAR

Effective Annual Rate, a comprehensive calculation of interest on a loan or investment, considering the effect of compounding.

APR

Annual Percentage Rate; the annual rate charged for borrowing or earned through an investment, accounting for compounding over the year.

Savings Account

A bank account where money is kept for savings purposes and earns interest over time.

Stated Interest Rate

The annual interest rate declared on a bond or loan, not accounting for compounding or the effect of any fees.