If Demand Is Price Elastic

question 43

Multiple Choice

If demand is price elastic

• A) a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent.
• B) a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent.
• C) a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent.
• D) the price is very sensitive to any shift of the supply curve.

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Definitions:

Debt Ceiling

A limit on the total amount of money the federal government can legally borrow.

Defense Spending

Government expenditure on military and defense-related activities, including salaries, equipment, operations, and research and development.

Budget Deficit

A financial situation where a government's expenditures exceed its revenues over a specified period, leading to borrowing or debt accumulation.

National Debt

National Debt is the total amount of money owed by a country's government to creditors, which can result from borrowing to cover budget deficits.