A Decrease in the Price of a Good Would

question 89

Multiple Choice

A decrease in the price of a good would

• A)increase the supply of the good.
• B)increase the quantity demanded of the good.
• C)give producers an incentive to produce more to keep profits from falling.
• D)shift the supply curve for the good to the left.

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Definitions:

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.

Premium

The amount by which the price of a financial instrument or insurance policy exceeds its face value or the cost above the normal price.

Modified Duration

A measure indicating the sensitivity of a bond's price to changes in interest rates, estimating the percentage price change for a parallel shift in yield curves.