Demand Is Said to Be Elastic If

question 96

Multiple Choice

Demand is said to be elastic if:

• A) the price of the good responds substantially to changes in demand
• B) the price of the good responds weakly to changes in demand
• C) the quantity demanded responds substantially to changes in the price of the good
• D) the quantity demanded responds weakly to changes in the price of the good

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Definitions:

Self-correcting Forces

Economic mechanisms that naturally work to restore equilibrium in markets without government intervention.

Potential GDP

The maximum output an economy can produce without triggering inflation, if it fully employs all available resources, including labor and capital.

Expansionary Gap

A situation where the actual level of output in an economy exceeds its potential output, often leading to inflation.

Active Approach

An active approach in policy-making or investment strategy entails ongoing, deliberate interventions or decisions to achieve specific economic or financial goals.