-Refer to the Above Graph to Answer This Question

question 22

Multiple Choice

-Refer to the above graph to answer this question.How could you describe the movement from point B to point C?

• A)An increase in supply which leads to a decrease in the equilibrium price and an increase in demand.
• B)An increase in demand which leads to a decrease in the equilibrium price and an increase in supply.
• C)An increase in supply which leads to a decrease in the equilibrium price and an increase in the quantity demanded.
• D)An increase in demand which leads to a decrease in the equilibrium price and a decrease in supply.
• E)An increase in supply which leads to an increase in the equilibrium price and an increase in demand.

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Definitions:

Disposable Income

The net income available to an individual or household after taxes have been deducted, used for savings or spending on goods and services.

Induced Consumption

An increase in spending on goods and services caused by an increase in income, reflecting a direct relationship between income levels and consumer spending.

APS

Average Propensity to Save, the fraction of income that is saved rather than spent on consumption goods.

APC

This stands for Average Propensity to Consume, which is the percentage of income that an individual or population spends rather than saving.