Price elasticity is defined as the change in quantity demanded relative to a change in
A. the price of substitute products.
B. the price of the product.
C. the price of complementary products.
D. consumer income.
Answer: B
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Unlike in the long-run model, in the short-run - Keynesian model, we make two critical assumptions: that firms adjust production depending on ___ , and that ____
a. total demand; prices are fixed b. resource limitations; prices are flexible c. the market rate of interest; consumers maximize utility d. consumer spending; there is full employment
If the money supply in an economy equals $1,000 and nominal GDP equals $3,000 . then according to the equation of exchange, velocity of money: a. equals 1/3
b. equals 3. c. equals 3 million. d. cannot be determined since we do not know anything about prices. e. cannot be determined since we do not know anything about real GDP.