What Happens to Equilibrium Price When Simultaneously Demand Increases and Supply

question 200

Multiple Choice

What happens to equilibrium price when simultaneously demand increases and supply decreases?

• A)Equilibrium price will increase.
• B)Equilibrium price will decrease.
• C)Equilibrium price will remain the same.
• D)Equilibrium price may increase,decrease,or remain the same depending on the magnitude of the shifts in demand and supply.

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Definitions:

Corporate Income Taxes

Taxes imposed on the net income (profits) of corporations, calculated based on tax rates that vary by jurisdiction.

Government Borrowing

The act of the state borrowing money, often by issuing securities like bonds, to fund its expenditures beyond its income.

Automatic Stabilizers

Financial strategies and initiatives, including taxation and unemployment insurance, that inherently adapt to mitigate economic variations without the need for further action by the government.

Aggregate Output

The total value of all goods and services produced in an economy within a given period of time.