Which of the following statements is true?
A) A decrease in demand causes equilibrium price to fall; the decrease in price then results in a decrease in quantity supplied.
B) If both demand and supply increase, there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
D) A decrease in demand causes a decrease in equilibrium price; the decrease in price causes supply to decrease.
A
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How are skilled and unskilled workers in an economy likely to be affected if firms adopt skill-biased technologies?
What will be an ideal response?
Under the price-specie-flow mechanism, what happens when, say, Germany's current account surplus is greater than its non-reserve capital account deficits?
A) German loans will finance all foreign net imports. B) Automatic drop in German domestic prices and rise in foreign prices. C) Gold reserves will flow into Germany. D) Gold reserves will flow out of Germany. E) Germany will experience a deficit.