The price elasticity of supply is 0.6. This means that
A) a $10 increase in price would increase quantity supplied by 60.
B) a 150 percent increase in price would increase quantity supplied by 90 percent.
C) a 50 percent increase in quantity will occur when price increases by 30 percent.
D) a 10 percent increase in quantity will occur when price increases by 6 percent.
B
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Which of the following statements is true?
A) The higher the required reserve ratio, the higher the deposit multiplier. B) The higher the excess reserves, the higher the deposit multiplier. C) The value of the deposit multiplier falls if economic agents withdraw cash from the banking system. D) The deposit multiplier only works to increase money supply, not to decrease money supply.
The law of demand illustrates a(n) ____ relationship between price and ____
a. direct; quantity demanded b. inverse; quantity demanded c. inverse; demand d. direct; demand