A decrease in demand and an increase in supply results in a(n)
a. decrease in equilibrium price and an ambiguous effect on equilibrium quantity
b. increase in equilibrium price and an ambiguous effect on equilibrium quantity
c. ambiguous effect on equilibrium price and an increase in equilibrium quantity
d. ambiguous effect on equilibrium price and an decrease in equilibrium quantity
e. increase in equilibrium price and a decrease in equilibrium quantity
A
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Firm ABC designs and implements a lower-cost method of producing its product. This is an example of:
A. product innovation. B. the inverted U-theory. C. economies of scale. D. process innovation.
If money demand is extremely sensitive to changes in the interest rate, the money demand curve becomes almost horizontal. If the Fed expands the money supply under these circumstances, then the interest rate will
A) fall substantially and investment and consumer spending will fall substantially. B) rise substantially and investment and consumer spending will rise substantially. C) fall substantially and investment and consumer spending will change very little. D) change very little and investment and consumer spending will change very little.