The Price Elasticity of Supply Is Defined as

question 73

Multiple Choice

The price elasticity of supply is defined as

• A) a one percent change in the price of a good divided by the percentage change in the quantity supplied.
• B) the change in quantity supplied divided by the change in price.
• C) the percentage change in the quantity supplied divided by the percentage change in the price of a good.
• D) the change in price divided by the change in quantity supplied.
• E) the reciprocal of the slope of the supply curve.

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Definitions:

Great Recession

A severe global economic downturn that occurred from late 2007 through mid-2009, marked by significant declines in housing prices and increased unemployment rates.

Required Reserve Ratio

The fraction of deposits that regulators require a bank to hold in reserve and not loan out, in order to ensure bank liquidity.

Money Supply

The comprehensive sum of all money available in an economy, counting cash, coins, and figures in checking and savings accounts, at a precise time.

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The central bank of the United States, responsible for setting monetary policy, regulating banks, and ensuring the stability of the financial system.