The available data strongly suggest that, as the "needs" argument would suggest, the demand for health care is virtually perfectly inelastic
Indicate whether the statement is true or false
FALSE
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Rational expectations involve the assumption that
A) market participants make use only of information on the past performance of an asset in determining what they believe its price should be. B) market participants rarely change their minds about the correct price of an asset. C) financial markets are good at increasing liquidity, but poor at transmitting information. D) market participants makes use of all available information.
On the graph above, a possible cause of the rightward shift of the IS curve is an increase in ________
A) foreign demand for domestic goods B) taxes C) domestic demand for foreign goods D) the exchange rate E) none of the above
If the supply of a good is perfectly inelastic, the price elasticity of supply will equal
A) positive infinity. B) one. C) zero. D) none of the above.
If the price of inputs falls and the level of consumer indebtedness rises:
a. Aggregate demand rises, but aggregate supply does not change. b. Aggregate demand falls, and aggregate supply rises. c. Aggregate demand and aggregate supply rise. d. Neither aggregate demand nor aggregate supply change. e. Aggregate demand rises, and aggregate supply falls.