All other factors being constant, a reduction in price tends to cause which of the following?
A) an increase in supply and an increase in demand
B) a reduction in supply and an increase in demand
C) an increase in quantity supplied and a reduction in quantity demanded
D) a reduction in quantity supplied and an increase in quantity demanded
Answer: D
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In banking, the spread refers to the difference between the
A) interest rate on long-term bonds and the interest rate on short-term bonds. B) interest rate on car loans and the interest rate on home mortgages. C) average interest rate earned on assets and the average interest rate paid on liabilities. D) bid and asked prices on a bond.
Any combination of goods beyond the budget line is not feasible
a. True b. False Indicate whether the statement is true or false
A German company wants to buy dollars to purchase U.S. bonds. In the open-economy macroeconomic model of the U.S., this transaction would be accounted for in
a. the supply of currency in the foreign exchange market, and the supply of loanable funds. b. the supply of currency in the foreign exchange market, and the demand for loanable funds. c. the demand for currency in the foreign exchange market, and the supply of loanable funds. d. the demand for currency in the foreign exchange market, and the demand for loanable funds.
Comparative advantage in production is achieved by
A. Subsidizing, specializing, and lowering the price of an exported good. B. Being able to produce a good with fewer inputs than in other countries. C. Having a lower opportunity cost of producing a good relative to that of other countries. D. Having terms of trade that are better than the terms of trade faced in other countries.