"Price elasticity measures how many more units of a good that consumers will buy given a decrease in price." Do you agree or disagree? Explain
What will be an ideal response?
Disagree. Price elasticity measures the percentage change in quantity demanded in response to a percentage change in price. As such, the statement is not valid as the elasticity measure is unit free.
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In the new Keynesian model, the ultimate effect on inflation of an anticipated aggregate demand shock is ________
A) less than if that event was unanticipated B) greater than if that event was unanticipated C) the same as would develop if that event had never occurred D) independent of whether or not that event is anticipated or unanticipated
GDP tends to rise and fall during economic fluctuations but other measures follow the same pattern. One of these measures is
A. the annual precipitation rate. B. the growth of the money supply. C. the inflation rate. D. the unemployment rate.