If both supply and demand decrease by the same amount, the equilibrium price
A) does not change.
B) rises.
C) falls.
D) cannot be predicted.
E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.
A
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Congress passed the ________ in 1996, the purpose of which was to phase out price floors and return to a free market in agriculture
A) Agribusiness Act B) Smoot-Hawley Act C) Freedom to Farm Act D) Rice and Beans Act
Picture an economy that is in general equilibrium. What would happen if the natural rate of unemployment were to experience a decrease?
A) according to the Phillips curve, the ensuing negative unemployment gap would exert inflationary pressures B) according to Okun's Law, the ensuing negative unemployment gap would be consistent with a positive output gap C) according to the AD-AS framework, the LRAS curve would shift to the right and the ensuing output gap would have to be closed by subsequent rightward shifts in the AS curve to a lower equilibrium level of inflation D) all of the above E) none of the above
While price discrimination is possible between two markets, it is not possible in more than two
Indicate whether the statement is true or false