Examlex
Suppose the price elasticity of demand for methamphetamine is -0.35.If decriminalization caused the price of methamphetamine to fall by 75 percent, what will be the percentage increase in the quantity of methamphetamine demanded? If the price elasticity is -3.5, what will be the percentage increase in quantity demanded?
Rational Expectations
An economic theory which suggests that individuals form forecasts about the future based on all available information, thereby influencing markets and potentially policy effectiveness.
Forecasting Economic Variables
The process of making predictions about future economic activity based on historical and current data, using statistical models and analysis techniques.
Disinflation
Occurs when the rate of inflation declines.
Monetarist View
An economic theory which argues that management of the nation's money supply is the key to controlling inflation and other forms of economic instability.
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