An increase in the supply of oranges in a town drives down its price by 5 percent. Which of the following changes will be observed in the market?
a. The demand for oranges will decrease.
b. The demand for oranges will increase.
c. The quantity of oranges demanded will increase.
d. The quantity of oranges demanded will decrease.
C
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Theory suggests that stock prices should be positively related to
A) government borrowing. B) the unemployment rate. C) the interest rate. D) the money supply.
You have won a lottery prize that promises to pay you and your descendants $1,000 a year forever. If the lowest price you are willing to sell this perpetuity for is $20,000, then you must be assuming that the relevant interest rate is
a. 5% b. 10% c. 15% d. 20%
The required reserve ratio for Bank A, Bank B, and Bank C is 10 percent. Bank A receives a deposit of $50,000 and uses all the resulting excess reserves to make a loan that is deposited into an account at Bank B. Bank B then uses all the resulting excess reserves to make a loan that is deposited into Bank C. How much money has been created as a result of this chain of transactions?
a. $9,500 b. $85,500 c. $45,000 d. $40,500
The value of all the equipment and structures of an economy is referred to as:
A) wealth. B) national income. C) asset value. D) capital stock.