Suppose That Both Supply and Demand for IPads Decrease

question 62

Multiple Choice

Suppose that both supply and demand for iPads decrease. One can predict that the:

• A)equilibrium price will rise but the equilibrium quantity can increase or decrease.
• B)equilibrium price and quantity will decrease.
• C)equilibrium price and quantity will rise.
• D)equilibrium quantity will fall but the equilibrium price can rise or fall.

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Definitions:

Constant Rate

A fixed rate of change, meaning something increases or decreases at a steady and unvarying speed or value over time.

Rational Expectations

The economic theory that individuals make decisions based on their rational outlook, available information, and past experiences.

Stabilization Policy

Economic strategies and actions taken by a government or central bank to stabilize an economy, aiming to reduce fluctuations in the business cycle.

Market Participants

Individuals or entities engaging in buying, selling, or other transactions in markets.