Related to the Economics in Practice on page 102: Which of the following best explains why demand is often less elastic in the short run than it is in the long run?
A. Consumers tend to postpone making purchasing decisions as long as possible.
B. In the short run, consumers have less access to substitutes.
C. In the short run, prices can change rapidly, but in the long run they are more stable.
D. When demand is elastic, price increases reduce revenue because a small price increase will lead to a large decrease in quantity demanded.
Answer: B
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The simple deposit multiplier is the ratio of the amount of
A) new reserves created by the banks to the amount of loans. B) loans issued by the banks to deposits created by the banks. C) new reserves created by the banks to the amount of deposits. D) deposits created by the banks to the amount of new reserves.
The economic scenario of the early 2000s did not include:
a. a stock market fall. b. low interest rates. c. a strong increase in employment. d. a fall in real investment.