Exhibit 5-3 Use the Following Information About Demand and Supply

question 155

Multiple Choice

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question.
Refer to Exhibit 5-3.If D₁ and S₁ represent the demand and supply schedules in a particular market,the equilibrium price and quantity are ____ and ____,respectively.

• A) $8; 15
• B) $6; 13
• C) $4; 16
• D) $4; 11

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Definitions:

Real Interest Rate

The interest rate recalibrated to factor in inflation, showcasing the real expense of borrowing or the legitimate profit from saving.

Nominal Interest Rate

The nominal interest rate, which reflects the raw rate of interest prior to being adjusted for inflation and represents the apparent value of financial dealings.

Market Basket

A selection of goods and services used to track price changes and inflation in an economy, representing the typical purchases made by consumers.

CPI

The Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.