Which of the following factors would indicate a more elastic demand?
A. The good is a necessity, rather than a luxury.
B. The good represents a small fraction of the budget.
C. Demand is measured over a longer period of time.
D. There are few substitutes for the good.
Answer: C
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If policy makers do nothing in response to a recessionary gap, what will happen?
a. a rapid movement toward lower unemployment and higher inflation b. a rapid movement toward lower unemployment and lower inflation c. a slow movement toward lower unemployment and higher inflation d. a slow movement toward lower unemployment and lower inflation
Assume that an inflationary gap must be closed by reducing aggregate expenditures. If consumers refuse to cut spending on consumption and producers won't cut demand for investment goods, the President:
A. can do nothing. B. must build more roads. C. must borrow from Wall Street. D. must cut government spending.
Refer to Figure 9-3. If there was no quota, how many pounds of peanuts would be imported?
A) 16 million B) 28 million C) 30 million D) 40 million
When drawn against the real interest rate, output supply increases if
A) current government expenses increase. B) future government expenses increase. C) current total factor productivity increases. D) the money supply increases.