If a good is price inelastic, an increase in price will decrease total revenues
Indicate whether the statement is true or false
FALSE
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Refer to Figure 13-4. Given the economy is at point A in year 1, what will happen to the price level in year 2?
A) It will fall. B) It will rise. C) It will remain constant. D) not enough information to answer the question
The purchasing power of money increases when
A) the inflation rate increases. B) there is inflation. C) there is deflation. D) there are more dollars in the economy.
Why is elasticity of demand greater for goods that are a large share of a consumer's budget?
What will be an ideal response?
If inflation increases unexpectedly, then
A) borrowers pay a higher real interest rate than they expected. B) lenders receive a lower real interest rate than they expected. C) lenders gain and borrowers gain. D) neither borrowers nor lenders lose.