The primary reason that supply variability can have a significant impact on price is that
A. supply for agricultural products tends to be inelastic.
B. demand for agricultural products tends to be elastic.
C. demand for agricultural products tends to be inelastic.
D. supply for agricultural products tends to be elastic.
Answer: C
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Which of the following statements is correct?
A. In the short run, interest rate differentials have the greatest impact on exchange rates. B. In the medium run, differences in growth rates of aggregate demand have the greatest impact on exchange rates. C. In the long run, price and inflation differentials have the greatest impact on exchange rates. D. All of the above are correct.
Over time, the wealth of society increases and payments technologies get more efficient. What is the effect on money demand of these two changes?
A) Money demand rises proportionately to the rise in wealth. B) Money demand rises, but less than proportionately to the rise in wealth. C) The overall effect is ambiguous. D) Money demand declines.
Markets are primarily responsible for the rapid rise in productivity during the 20th century.
Answer the following statement true (T) or false (F)
Which of the following would be most appropriate if the Federal Reserve wanted to increase the money supply in order to stimulate the economy?
A. Buy U.S. government securities. B. Force the Treasury to reduce the national debt. C. Raise the discount rate. D. Increase the reserve requirements.