Which is not a reason the demand curve for loanable funds slopes down?
A. The value of the MRP in terms of today’s money shrinks as the interest rate rises.
B. Future returns must be discounted more when the interest rate rises.
C. As the interest rate rises, more and more investments become unprofitable.
D. Production becomes more profitable in the future, reducing required inputs today.
Answer: D
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If the demand for a good is perfectly inelastic, then:
a. the value of price elasticity of demand of the good is equal to 1. b. the value of price elasticity of demand of the good is equal to -1. c. the demand curve of the good is nonexistent. d. consumers are very responsive to a change in the price of the good. e. quantity demanded does not change when price of the good changes.