The Demand for Items on Which We Spend a Large

question 183

Multiple Choice

The demand for items on which we spend a large percentage of our income

• A)will be perfectly inelastic.
• B)will tend to be elastic.
• C)will tend to be inelastic.
• D)will be perfectly elastic.

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Definitions:

Standard of Value

A recognized measure that is used to set the value of financial transactions, assets, or liabilities, enabling comparability across different entities or time periods.

Backed by Gold

Historically, refers to currencies that were directly convertible into a specified amount of gold, under the gold standard.

Precautionary Motive

The desire to hold liquid assets as a safeguard against unforeseen emergencies or as a precaution against future financial uncertainties.

Speculative Motive

The intent to hold cash or assets in anticipation of future price changes to make a profit.