Exhibit 4-B -Refer to Exhibit 4-B.The Graph That Best Illustrates a Relatively

question 242

Multiple Choice

Exhibit 4-B
-Refer to Exhibit 4-B.The graph that best illustrates a relatively inelastic (but not perfectly inelastic) demand curve is:

• A)Graph A.
• B)Graph B.
• C)Graph C.
• D)Graph D.

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Definitions:

Political Business Cycle Theory

A theory suggesting that elected officials may manipulate economic policies to produce favorable economic conditions ahead of elections to increase their chances of reelection.

Discount Rate

The interest rate on the loans that the Fed makes to banks.

Re-Elected

The act of being elected again for the same position or office after completing a term.

Short-Run Phillips Curve

An economic model suggesting an inverse relationship between the rate of inflation and the unemployment rate in the short term.