Explain how it is possible for a downward-sloping demand curve to have a constant slope but still have a variation of elasticity of demand along it
What will be an ideal response?
Slope measures rise over run. However, elasticities measure percent changes in the quantity demanded divided by the percent change in the price. Even along a linear demand curve with a constant slope the demand is more elastic in the upper left-hand corner and becomes less elastic as one moves down and to the right until it becomes unitary and then inelastic.
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If the exchange rate changes from $2.00 = 1 euro to $1.98 = 1 euro then
A) the dollar has appreciated. B) the euro has appreciated. C) the euro has stayed constant in value. D) the dollar has depreciated.
A decrease (shift to the left) in aggregate supply can lead to
a. demand-pull deflation b. demand-pull inflation c. prosperity d. cost-push inflation e. cost-push deflation