Which of the following is true?
A. At the same price, demand is more elastic on the steeper demand curve.
B. On a linear demand curve, elasticity is constant.
C. On a linear demand curve, the higher the price, the less elastic is demand.
D. None are true.
Answer: D
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The interest rate falls if
a. either money demand or money supply shifts right. b. money demand shifts right or money supply shifts left. c. either money demand or money supply shifts left. d. money demand shifts left or money supply shifts right.
Which of the following best explains how consumer spending can decrease even if disposable income remains the same?
a. Supply may decrease, raising the price of many goods.
b. The value of the consumers’ assets, such as stocks or property, might rise.
c. Inflation reduces the purchasing power of consumers’ disposable income.
d. Higher interest rates cause an increase in saving and decrease in spending.