If a consumer's demand curve as constant own-price elasticity of -2, the consumer's spending will fall as price increases.
Answer the following statement true (T) or false (F)
True
Rationale: When demand is relatively price elastic (as it is for own-price elasticities below -1), an increase in price causes a sufficient response in the quantity demanded such that spending falls.
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Refer to Figure 28-1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run?
A) Sell treasury bills. B) Increase the money supply. C) Lower the discount rate. D) Buy treasury bills. E) No policy will move the economy to point C in the long run.
Higher protection raises the overall level of employment
Indicate whether the statement is true or false