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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If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the
A) home equity effect. B) inflation effect. C) wealth effect. D) multiplier effect.
When considering different investments, a risk-averse investor is most likely to focus on purchasing:
A. investments that offer the lowest standard deviation in the investments' expected rates of return for any given expected rate of return. B. investments with the lowest risk premium, regardless of the expected rate of return. C. investments with the greatest spread in the expected rate of return. D. only risk-free investments.