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If Demand Is Unit Elastic, Then a 10 Percent Increase

question 157

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If demand is unit elastic, then a 10 percent increase in the price will lead to a 10 percent increase in quantity demanded.


Definitions:

Gold Stock

A quantity of gold held by a central bank or government to support the value of its currency and as a form of investment.

Money Supply

The sum of all financial assets in an economy, including cash, coins, and the amounts in checking and savings accounts at a given point in time.

International Currency

A currency that is widely used for global transactions and accepted between countries, such as the US dollar or Euro.

Paul Krugman

An American economist and columnist known for his work on international economics, trade theory, and economic geography, as well as for being a Nobel laureate.

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