If a 5 Percent Change in the Price of a Good

question 54

Multiple Choice

If a 5 percent change in the price of a good leads to a 10 percent change in the quantity supplied, then the supply of the good is ________ and the elasticity of supply is ________.

• A) inelastic; 0.5
• B) inelastic; 2.0
• C) elastic; 0.5
• D) elastic; 2.0

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Definitions:

Fixed-Income Securities

These are investment types that pay regular (often fixed) interest or dividend payments until maturity, at which point the principal is repaid.

Fixed Stream

A term generally relating to a constant or unchanging flow of income, payments, or data over a period of time.

Subordination Clauses

Provisions in a contract that determine the ranking of claims in the event of a debtor default, making some debts subordinate to others.

Bond Indentures

A legal and binding agreement that outlines the specific promises made to bondholders, including the terms of the bond, such as its maturity date, timing of interest payments, and method of interest calculation.