Economist a Believes That the Elasticity of Investment Is 0

question 48

Multiple Choice

Economist A believes that the elasticity of investment is 0.76 while economist B believes that the elasticity of investment is 1.76.Which economist,A or B,is more likely to believe that a change in the interest rate will change the current economic environment?

• A) Economist A,since she believes that investment is more sensitive to changes in interest rates than does economist B.
• B) Economist B,since she believes that investment is more sensitive to changes in interest rates than does economist A.
• C) Economist A,since she believes that investment is less sensitive to changes in interest rates than does economist B.
• D) Economist B,since she believes that investment is less sensitive to changes in interest rates than does economist A.

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