If an Increase in Price from $1

question 185

Multiple Choice

If an increase in price from $1.20 to $2 per unit leads to an increase in quantity supplied from 20 to 100 units,

• A)demand is elastic
• B)demand is inelastic
• C)demand is unit elastic
• D)supply is elastic
• E)supply is inelastic

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Definitions:

Anticipated Inflation Rate

The inflation rate that individuals and businesses expect to prevail in the future, influencing their economic decisions.

Real Wage Increases

Adjustments in wages that are above the rate of inflation, resulting in an increase in purchasing power for the wage earner.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, consequently, the purchasing power of currency is falling.

Borrowers

Individuals or entities that take out loans from financial institutions or other sources, committing to repay them over a specified period, often with interest.