If the demand for flashlights is highly inelastic, this indicates that
a. higher flashlight prices will increase the demand for flashlights.
b. the price elasticity of demand for flashlights is greater than 1.
c. the price elasticity of demand for flashlights equals 1.
d. the quantity of flashlights purchased by consumers is not very responsive to a change in the price of flashlights.
D
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The quantity theory of money implies that:
A) inflation is equal to the gap between the growth rate of money supply and the current real interest rates. B) inflation is equal to the gap between the growth rate of money supply and the growth rate of nominal GDP. C) inflation is equal to the gap between the growth rate of money supply and the current nominal interest rates. D) inflation is equal to the gap between the growth rate of money supply and the growth rate of real GDP.
Economic expansions might lead to inflation because an expansion leads to
A) a decrease in the unemployment rate, which decreases wages. B) an increase in the unemployment rate, which decreases wages. C) an increase in the unemployment rate, which increases wages. D) a decrease in the unemployment rate, which increases wages.