The price of apples falls. What happens in the market for apple pies?
A) The equilibrium price falls, and the equilibrium quantity rises.
B) The equilibrium price rises, and the equilibrium quantity falls.
C) The equilibrium price and quantity rise.
D) The equilibrium price and quantity fall.
Ans: A) The equilibrium price falls, and the equilibrium quantity rises.
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If actual aggregate expenditure equals aggregate planned expenditure, then
A) firms obtain the desired change in their inventories. B) there is never any change in firms' inventories. C) unplanned inventory changes are negative. D) actual aggregate expenditure might be greater than, equal to, or less than real GDP. E) unplanned inventory changes are positive.
If the Fed conducts an open market purchase of Treasury bonds, this will
A) encourage banks to make more loans and will increase the money supply. B) encourage banks to make more loans and will decrease the money supply. C) cause banks to reduce their loans and will increase the money supply. D) cause banks to reduce their loans and will decrease the money supply.
Suppose demand is given by Qxd = 50 ? 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. What is the quantity demanded of good x?
A. 46 B. 96 C. 72 D. 50
Refer to the information provided in Figure 26.4 below to answer the question(s) that follow. Figure 26.4Refer to Figure 26.4. Suppose the economy is at Point A, an increase in aggregate demand moves the economy to Point
A. E. B. B. C. C. D. D.