The interest-rate effect is the impact on real GDP caused by the direct relationship between the interest rate and the:

When would demand for a good be more inelastic?

a) when there are fewer available substitutes b) when the time period is considered longer c) when the good is considered more of a luxury good d) when the market is more narrowly defined

For a given decrease in demand, the effect on price is smallest and the effect on quantity exchanged largest when: a. supply is perfectly elastic

b. supply is elastic. c. supply is unit elastic. d. supply is perfectly inelastic.