"As the price of personal computers continues to fall, demand increases." This headline is inaccurate because:
A. a change in the price of personal computers shifts the supply curve.
B. a falling price of personal computers increases the quantity demanded, not demand.
C. the statement is backwards: increased demand leads to lower prices.
D. a change in the price of personal computers shifts the demand curve.
Answer: B
You might also like to view...
Suppose the current situation is such that the price level is 120, real GDP is $17 trillion, and GDP along the long-run aggregate supply curve is $16.6 trillion. What will take place to restore the long-run equilibrium?
A) The price level will fall until long-run aggregate supply increases to $17 trillion. B) The price level will fall and money wage rates will rise until real GDP along the long-run aggregate supply curve is $17 trillion. C) Money wage rates will rise until real GDP reaches $16.6 trillion. D) Aggregate demand will increase until both short-run and long-run aggregate supply equal $17 trillion.
If the price of a bond increases, the interest rate (or rate of return on the bond) decreases
a. True b. False