A change in the price level
A) shifts the AE curve and creates a movement along the AD curve.
B) creates a movement along both the AE curve and the AD curve.
C) shifts the AE curve and the AD curve in opposite directions.
D) creates a movement along the AE curve and shifts the AD curve.
E) shifts the AE curve and the AD curve in the same direction.
A
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Dana is an art historian who needs to travel to Italy to do research. Art historians usually don't have a lot of money, and therefore are very sensitive to price changes. Dana's funding agency pays her a fixed amount to travel. At current exchange rates, Dana can stay in Italy for 35 days. If the exchange rate improves by 10 percent, she can stay for 40 days. What is Dana's price elasticity of
demand for days spent in Italy? a. It is approximately equal to 2.3. b. It is approximately equal to 1.6. c. It is approximately equal to 1.4. d. It is approximately equal to 0.4. e. It is approximately equal to 0.1.
Which actor in the simplified circular flow model buys or rents land, labor, and capital?
A. Firms B. Households C. Markets for factors of production D. Government