When the price of a product increases, the passage of time usually causes the price elasticity of demand for the product to become
a. less elastic.
b. more elastic.
c. smaller and smaller in an absolute value.
d. approximately equal to zero in the long run because of scarcity.
B
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As interest rates fall, the
A) promised payments of bonds fall. B) face values of bonds fall. C) price of bonds rises. D) price of bonds falls.
With each 99 cent iTunes download, GDP
A) rises by 99 cents. B) falls by 99 cents. C) remains unchanged. D) is impossible to measure with this sale because nothing physical has been produced.
The interest rate at which businesses borrow to fund their investments is higher than the real interest rate for short-term, safe loans, because ________
A) business borrowers sometimes default on their loans B) autonomous investment is not dependent on borrowed funds C) the central bank controls the short-term, safe interest rate D) the interest rate is negatively-related to business optimism E) all of the above
Which of the following statements is NOT true about inflation?
A) Inflation is a sustained increase in the average prices of goods in the economy. B) During an inflationary period, the prices of some goods will increase while the price of some goods will decrease. C) When there is inflation, the purchasing power of a dollar decreases. D) During an inflationary period, the prices of all goods will increase.