If quantity demanded does not change when the price changes, the demand:
A. is perfectly inelastic.
B. is elastic.
C. is inelastic.
D. has unit elasticity.
Answer: A
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A rise in the price level
A) raises the buying power of money. B) decreases the prices of exports. C) lowers the buying power of money. D) increases aggregate demand. E) makes the aggregate demand curve steeper.
An increase in the population and hence the supply of labor causes a
A) shortage of labor at the original real wage rate and the real wage rate will fall. B) surplus of labor at the original real wage rate and the real wage rate will rise. C) surplus of labor at the original real wage rate and the real wage rate will fall. D) shortage of labor at the original real wage rate and the real wage rate will rise.
According to the quantity theory of money, if the money supply grows at 20 percent and real GDP grows at 5 percent, then the inflation rate will be
A) 15 percent. B) 20 percent. C) 25 percent. D) 100 percent.
If an excess quantity of labor demanded exists in a free market, there is a tendency for
A) quantity supplied to rise. B) the wage rate to fall. C) quantity demanded to fall. D) the wage rate to rise.