A Unit Elastic Demand

question 27

Multiple Choice

A unit elastic demand

• A)means that the ratio of a change in quantity demanded to a change in price is equal to 1.
• B)means that the ratio of a percentage change in quantity demanded to a percentage change in price is equal to 1.
• C)means that the ratio of a change in price to a change in quantity demanded is equal to 1.
• D)is illustrated by a horizontal demand curve.
• E)is illustrated by a vertical demand curve.

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Definitions:

Inflation

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power over time.

Asset Prices

The monetary value assigned to financial and non-financial assets in the marketplace, including stocks, bonds, real estate, and commodities.

Inflation Expectations

The anticipations of consumers and businesses about the rate at which prices for goods and services will rise in the future.

Unemployment

The situation when individuals who are actively seeking work are unable to find employment.