In general, the smaller the price elasticity:
a. the smaller the responsiveness of price to changes in quantity.
b. the smaller the responsiveness of quantity to changes in price.
c. the larger the responsiveness of price to changes in quantity.
d. the larger the responsiveness of quantity to changes in price.
b
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The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in the price level. B) less sensitive consumption, investment, and net exports are to changes in interest rates. C) more sensitive consumption, investment, and net exports are to changes in interest rates. D) more sensitive consumption, investment, and net exports are to changes in the price level.
The demand for loanable funds slopes
A) downward because NPV falls as interest rates fall. B) downward because NPV falls as interest rates rise. C) downward because NPV falls as money enters the economy. D) upward because at higher interest rates people are more willing to save. E) upward because at higher interest rates the stock market is a less attractive investment.