When the Absolute Price Elasticity of Demand Equals 1, Demand

question 34

Multiple Choice

When the absolute price elasticity of demand equals 1, demand is

• A) elastic.
• B) unit-elastic.
• C) inelastic.
• D) undetermined without more information.

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Definitions:

Foreclosure

The legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on a loan.

Fixed-Rate Mortgages

A type of mortgage in which the interest rate remains constant throughout the term of the loan.

Government Backing

Support or endorsement provided by governmental entities, often in the form of guarantees, subsidies, or policies.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.