Exhibit 4-3 Supply and Demand Curves

question 193

Multiple Choice

Exhibit 4-3 Supply and demand curves

-Initially the market shown in Exhibit 4-3 is in equilibrium at P₂,Q₂ (E₂) .Changes in market conditions result in a new equilibrium at P₂,Q₄ (E₄) .This change is stated as a(n) :

• A) increase in supply and an increase in demand.
• B) increase in supply and a decrease in demand.
• C) decrease in demand and a decrease in supply.
• D) increase in demand with supply held constant at S2.

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Definitions:

Current Liabilities

Financial obligations or debts of a business that are due to be settled within one year from the balance sheet date.

Net Monetary Assets

The difference between monetary assets and monetary liabilities, used to assess liquidity position.

Exchange Gain

The profit realized from the sale of securities or foreign exchange transactions when the exchange rate moves in a favorable direction.

Functional Currency

The primary currency used by a business or unit in its financial transactions, reflecting the economic environment in which it primarily operates.