Demand for necessities is elastic, while demand for luxuries is inelastic.
a. true
b. false
Answer: b. false
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The aggregate demand curve shows the relationship between short-run equilibrium output and the:
A. nominal interest rate. B. unemployment rate. C. inflation rate. D. real interest rate.
If the U.S. were to place a carbon tax on fossil fuels, we can expect:
A. the price of fuel oil to decrease. B. the price of fuel oil to increase. C. no change in the price of fuel oil. D. an increase in demand for fuel oil.
The Keynesian portion of the short-run aggregate supply (SRAS) curve implies
A. the price level does not change. B. flexible prices and wages. C. a downward slope. D. an upward slope.
If the price-elasticity coefficient for a good is .75, the demand for that good is described as:
A. Normal B. Elastic C. Inferior D. Inelastic