If the Price of Good X Increases by 1 Percent

question 63

Multiple Choice

If the price of good X increases by 1 percent, then the quantity supplied increases by more than 1 percent. This means

• A) supply is elastic.
• B) supply is unit-elastic.
• C) supply is inelastic.
• D) the good has good substitutes.

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Definitions:

Reserve Deficiency

A situation in which a bank does not have enough reserves to meet the central bank's requirements.

Federal Reserve Districts

Geographic regions in the United States, each with a specifically designated Federal Reserve Bank, responsible for implementing the nation's monetary policy.

Fed Chairman

The leading figure of the Federal Reserve, the central banking system of the United States, responsible for monetary policy direction.

Federal Funds Market

A market where banks lend and borrow reserves from each other overnight in order to meet reserve requirements set by the central bank.