In case of a linear negatively sloped demand curve, the price elasticity of demand:
A) is zero between any two points on the curve.
B) is the same between any two points on the curve.
C) is different at different points on the curve.
D) is equal to the slope between different points on the demand curve.
C
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Suppose Bank A holds $50,000 in deposits with other banks. In the balance sheet, this amount will be accounted as Bank A's:
A) cash equivalents. B) short-term borrowing. C) long-term investments. D) reserves.
If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.