When a firm wants to borrow directly from the public to finance the purchase of new equipment, it does so by selling bonds

Suppose that the current price level is 110, real GDP is $100 billion, and long-run aggregate supply is $95 billion. We can conclude that

A) the price level will fall and input prices will rise until real GDP pulls long-run aggregate supply up to $100 billion. B) aggregate demand will increase until both short-run and long-run aggregate supply equal $100 billion. C) the price level will fall until long-run aggregate supply shifts to $100 billion. D) input prices will rise until real GDP is $95 billion.

The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________ decrease in the quantity demanded

A) 2 percent B) 5 percent C) 10 percent D) 50 percent