If demand is inelastic, the absolute value of the price elasticity coefficient is greater than one
Indicate whether the statement is true or false
FALSE
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The price elasticity of supply equals the percentage change in the
A) quantity demanded divided by the percentage change in the price of a substitute or complement. B) quantity supplied divided by the percentage change in price. C) quantity demanded divided by the percentage change in price. D) supply divided by the percentage change in the demand. E) quantity supplied divided by the percentage change in the quantity demanded.
Forward guidance refers to central banks
A) setting long-term interest rates. B) engaging in monetary policy to offset the negative side-effects of the government's fiscal policies. C) telling the public what future monetary policy will be. D) simultaneously reducing unemployment and inflation.
If the Fed increases the money supply in response to positive demand shocks, it
a. lowers the interest rate b. reduces each type of unemployment c. adds its own positive demand shock d. creates financial stability e. crowds out private investment
The global financial and economic crisis that began to develop in 2007
A. arose in industrial countries. B. was the result of a prolonged period of declining world production. C. arose in developing countries. D. was worse than the Great Depression of the 1930s.