Demand is said to be inelastic if the
a. quantity demanded changes proportionately more than price.
b. price changes proportionately more than income.
c. quantity demanded changes proportionately less than price.
d. quantity demanded changes proportionately the same as price.
c
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The nation of Hyperbole is in a recession, and the government decides to increase taxes and reduce government spending to reduce the growing deficit. This will ________ aggregate demand and will likely ________ real GDP and employment
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
The income elasticity of demand for shoes is estimated to be 1.50. We can conclude that shoes:
A. have a relatively steep demand curve. B. have a relatively flat demand curve C. are a normal good. D. are an inferior good.