Exhibit 4-6 Demand and supply curves
If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:
A. market price will decrease, and market quantity exchanged will increase.
B. market price will increase, and market quantity exchanged will decrease.
C. market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
D. market price could increase, decrease, or remain the same, and quantity exchanged will increase.
Answer: C
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If in the market for bananas the supply curve has shifted to the right, then
A) the supply of bananas has decreases. B) the quantity of bananas supplied has decreased. C) the quantity of bananas supplied has increased. D) the supply of bananas increased.
The automatic budget surpluses and budget deficits that occur in the federal budget over the business cycle
A) stabilize the economy. B) destabilize the economy. C) decrease potential GDP. D) increase potential GDP.
The supply curve shows
a. the same basic information as the demand curve. b. who will have an opportunity to produce or purchase an item. c. the quantity produced as a function of the price. d. plots of what quantities have been sold over the past few weeks or months.
When exchange rates are very volatile, with a wide range of variation, the currency is said to be:
a. in limbo. b. in free float. c. perfectly flexible. d. in sluggish float.