Elasticity Is a Measure of

question 21

Multiple Choice

Elasticity is a measure of

• A) how quickly a particular market reaches equilibrium.
• B) the change in income associated with increased education.
• C) the responsiveness of one variable to a change in another variable.
• D) the effect of an increase in the number of consumers in a particular market.
• E) how quickly expansion can take place in an economy.

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Definitions:

Nominal Interest Rate

The interest rate before adjustments for inflation, representing the face value of interest payments.

Rational Consumer

An assumption in economics that consumers always make logical decisions that provide them with the highest level of personal utility.

Net Borrower

An entity, such as a government or a business, that borrows more money than it lends, resulting in a net outflow of funds.

Interest Rate

The part of a loan that incurs interest for the borrower, generally expressed as an annual percentage of the outstanding loan.