Graphically, what is the main difference between the measure of income elasticity of demand as opposed to the measure of price elasticity of demand?
What will be an ideal response?
Graphically, income elasticity of demand is measured by a horizontal shift in the demand curve in response to a change in income, while price elasticity of demand is measured by a movement along the demand curve in response to a change in price.
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In the prisoner's dilemma:
A. a dominant strategy exists for only one player. B. a non-cooperative outcome is predicted. C. a cooperative win-win outcome can be predicted. D. All of these statements are true.
If the MPC is 0.80, then a change in disposable income of $60 billion will lead to an initial change in consumption of
A. $30 billion. B. $42 billion. C. $48 billion. D. $60 billion. E. $70 billion.
According to Keynes, the economy could become stuck at a low income level if:
A. declines in aggregate supply are not accompanied by declines in aggregate demand. B. declines in aggregate demand are not accompanied by declines in aggregate supply. C. aggregate demand and aggregate supply are independent of one another. D. declines in aggregate demand and aggregate supply reinforce one another.
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.