Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A)An increase in demand causes an increase in equilibrium price;the increase in price causes supply to increase.
• B)A decrease in supply causes equilibrium price to rise;the increase in price then results in a decrease in quantity demanded.
• C)If both demand and supply decrease,there must be a decrease in equilibrium price;equilibrium quantity may either increase or decrease.
• D)If demand increases and supply decreases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

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Definitions:

Real GDP

The assessment of a nation's economic production, corrected for variations in price levels (either inflation or deflation), representing the real worth of all goods and services generated.

Aggregate Demand Curve

A graphical representation that shows the relationship between the overall price level in the economy and the total demand for goods and services at that price level.

Velocity of Money

The rate at which money is exchanged from one transaction to another, and how much a unit of currency is used in a given period.

ATM Machines

Automated Teller Machines where individuals can perform financial transactions, such as cash withdrawals, deposits, and fund transfers, without the need for direct interaction with bank staff.