An increase in the MPC
a. increases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand.
b. increases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand.
c. decreases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand.
d. decreases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand.
a
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The price of a new portable CD player falls from $100 to $90 . The quantity of CD players demanded rises from 15,000 per year to 20,000 per year. Use the midpoint formula to calculate the price elasticity of demand for portable CD players
Is the demand elastic, inelastic, or unit elastic?
If the relative price of S in terms of T is 2 and S has a nominal price of $1, then the relative price of T is
A) $2. B) 50 cents. C) 1/2 S. D) Need more information to answer.