The elasticity of demand for a product is likely to be greater:
A. if the product is a necessity, rather than a luxury good.
B. the greater the amount of time over which buyers adjust to a price change.
C. the smaller the proportion of one's income spent on the product.
D. the smaller the number of substitute products available.
Answer: B
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In 1994, the Bureau of Labor Statistics started to report
A) the unemployment rate weekly to provide a better picture of the labor market. B) alternative measures of the unemployment rate that include narrower measures of the labor market. C) alternative measures of the unemployment rate that include broader measures of the labor market. D) the unemployment rate by surveying 200,000 households. E) B and C are correct answers.
In the "cost of capital channel" of monetary policy, a lower interest rate __________ spending
A) raises consumption B) raises investment C) lowers consumption D) lowers investment