The price-elasticity of demand is always negative because of:
A. The law of demand
B. Percent-changes being used in the formula
C. The midpoint formula
D. Scarcity
A. The law of demand
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Refer to the scenario above. If each family pays 12% of its income as tax every year, the local government follows a(n) ________ tax system
A) cardinal B) ordinal C) progressive D) proportional
A price-setting firm prefers to operate in the inelastic portion of its demand curve because total revenue increases when price is increased
Indicate whether the statement is true or false
The existence of lags prevents the instantaneous adjustment of the economy to policies changing aggregate demand, thereby strengthening the case for
A) supply-side policy. B) nonactivists. C) activists. D) demand-management policy.
Businesses hold substantial balances in demand deposits for all of the following reasons EXCEPT:
A) they cannot hold NOW accounts B) the existence of low transaction costs C) to maintain liquidity D) relatively high interest rates