Along the Elastic Range of a Demand Curve, a Price

question 24

Multiple Choice

Along the elastic range of a demand curve, a price change causes:

• A) a change in total revenue in the opposite direction.
• B) a change in total revenue in the same direction.
• C) no change in total revenue.
• D) an unpredictable change in the total revenue.

Calculate and interpret the sacrifice ratio in scenarios of disinflation.

Explain the impact of central bank policies on unemployment and inflation, including the role of expectations.

Describe the effects of supply shocks on the economy and the response of the central bank.

Discuss the long-term and short-term impacts of contractionary monetary policy.

---

Definitions:

Dementia

A broad category of brain diseases that cause a long-term and gradual decrease in the ability to think and remember, affecting daily functioning.

Dehydration

A condition resulting from the excessive loss of body water, impairing normal bodily functions.

Distractibility

A condition where an individual has difficulty maintaining attention and is easily drawn away from tasks by irrelevant stimuli.

Severe Depression

A psychiatric disorder manifested by an enduring downturn in mood or diminished pleasure in usual activities, severely disrupting normal life activities.