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If the Demand for Movies Increases at the Same Time

question 156

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If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.


Definitions:

Graphically

Refers to representing data or models visually using graphs or charts.

Spread

Compensation to the underwriter, determined by the difference between the underwriter’s buying price and offering price. Also, the gap between the interest rate a bank pays on deposits and the rate it charges on loans.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percent rate.

Bank Deposits

Funds that are placed into banking institutions for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.

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