The Change in the Price of a Foodstuff Will Be

question 15

Multiple Choice

The change in the price of a foodstuff will be greater,

• A)the smaller the change in the supply of the foodstuff.
• B)the greater the change in the supply of the foodstuff and the more inelastic the demand curve for the foodstuff.
• C)the lesser the change in the supply of the foodstuff and the more inelastic the demand curve for the foodstuff.
• D)the greater the change in the supply of the foodstuff and the more elastic the demand curve for the foodstuff.
• E)the lesser the change in the supply of the foodstuff and the more elastic the demand curve for the foodstuff.

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Definitions:

Laffer Curve

An economic theory proposing there exists a tax rate at which government revenue is maximized, suggesting that both higher and lower tax rates can lead to decreased revenue.

Fiscal Policy

The use of government spending and tax policies to influence economic conditions, including economic growth, inflation, and unemployment.

Monetary Policy

A strategy by which a central bank controls the supply of money in an economy, often targeting interest rates to achieve economic stability or growth.

Federal Reserve

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