If the Quantity Demanded Is Very Responsive to a Price

question 86

Multiple Choice

If the quantity demanded is very responsive to a price change, then the demand curve would be:

• A) unit elastic.
• B) elastic.
• C) inelastic.
• D) vertical.

---

Definitions:

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds in the financial markets, achieving a balance.

Aggregate-Demand Curve

A graphical representation of the total demand for goods and services within an economy at varying price levels.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability and growth.

Aggregate Demand

Total need for every type of good and service within an economic system, quantified at a specific price level and during a certain timeline.