The Price Elasticity of Demand Coefficient for a Good Will

question 112

Multiple Choice

The price elasticity of demand coefficient for a good will be lower:

• A) if there are few substitutes for the good.
• B) if expenditure on it is a small part of one's budget.
• C) both a and b are true.
• D) neither a nor b are true.

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Definitions:

Milton Friedman

A prominent American economist known for his strong belief in free-market capitalism and for being a leading proponent of monetarism in economic policy.

Monetarist

An economic theory that emphasizes the role of governments in controlling the amount of money in circulation as the primary method for ensuring economic stability and growth.

Money Supply

The total amount of money available in an economy, including cash, coins, and balances held in checking and savings accounts.

Classical Economists

Economists from the late 18th and early 19th centuries who focused on the role of free markets in promoting economic growth and wealth distribution.