The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the
A) demand and the supply of a good both increase.
B) demand for a good increases and the supply of it decreases.
C) demand for a good decreases and the supply of it increases.
D) demand and the supply of a good both decrease.
D
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Which of the following statements accurately describes a commonality between the classical and Keynesian schools of thought?
a. Prolonged unemployment is impossible over the long run. b. Wages, prices, and interest rates adjust quickly in the short run. c. In the long run an economy returns naturally to its potential output level. d. Prolonged recessions are due to wage inflexibility.
Suppose that Figure 7.4 shows an industry's market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, a representative firm would charge a price of:
A. $35. B. $25. C. $20. D. $16.
Maximum checkable-deposit expansion in the banking system is equal to:
A. Actual reserves minus required reserves B. Assets plus net worth and liabilities C. Excess reserves times the monetary multiplier D. Excess reserves divided by the monetary multiplier
Consider the change in the price of a book depicted in the above figure. The original budget line is BC. The new budget line is BD. As a result of this price change, the income effect can be represented by a movement from
A) point E to point F. B) point G to point A. C) point G to point F. D) point A to point F.