The demand for most products is likely to be
a. more elastic in the long run than in the short run.
b. less elastic in the long run than in the short run.
c. equally elastic in the short and long run.
d. equally inelastic in the short and long run.
A
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In the long run, ________ dominate exchange rate movements
A) short-run inflation differentials B) long-run inflation differentials C) short-run relative price changes D) All of the above
If the U.S. government went from a budget deficit to a budget surplus then
a. the interest rate and the real exchange rate would increase. b. the interest rate and the real exchange rate would decrease. c. the interest rate would increase and the real exchange rate would decrease. d. the interest rate would decrease and the real exchange rate would increase.