If the Price of a Good Doubles and Quantity Supplied

question 192

Multiple Choice

If the price of a good doubles and quantity supplied triples, then

• A)demand is elastic
• B)demand is inelastic
• C)supply is inelastic
• D)supply is elastic
• E)there is insufficient information to reach any conclusion about the price elasticity of supply

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Definitions:

Reserves

Funds or commodities set aside for future use or to meet unforeseen contingencies, often related to banks or natural resources.

Money Creation

The process by which the money supply of a country, or of an economic or monetary region, is increased.

Depository Institutions

Financial institutions that accept deposits from individuals and provide loans, such as banks and credit unions.

Loans

Sums of money borrowed that are expected to be paid back with interest by the borrower over a specified period of time.