If the Payments to a Factor Represent a Small Proportion

question 22

True/False

If the payments to a factor represent a small proportion of total cost, then the demand for the factor will tend to be relatively inelastic.

---

Definitions:

Real GDP

The total value of all goods and services produced by a country adjusted for inflation, reflecting the real quantity of goods and services produced.

Percentage Change

A mathematical calculation that describes the degree of change over time, often used to compare the difference between two numbers expressed as a fraction of the initial value.

GDP Deflator

A price index that measures the change in the price level of all new, domestically produced, final goods and services in an economy.

Real GDP

Gross Domestic Product adjusted for inflation, which represents the value of all goods and services produced over a specific time period within a country.