What Does the Demand Curve for Euros Illustrate

question 22

Multiple Choice

What does the demand curve for euros illustrate?  

• A) a direct relationship between the dollar price of a euro and the quantity of euros demanded 
• B) an inverse relationship between the dollar price of a euro and the quantity of euros demanded 
• C) that the higher the dollar price of a euro, the greater the quantity demanded 
• D) that the more expensive it is to buy euros, the larger the quantity of European goods demanded by Canadians

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Definitions:

Infinitely Elastic

Describes a perfectly elastic demand or supply curve, where the quantity demanded or supplied changes by an unlimited amount in response to any change in price.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in income.

Supply Elasticity

The measure of responsiveness of the quantity of a good supplied to a change in its price.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust all inputs in response to market conditions.