Suppose That at the Price Dollars the Demand for a Product

question 26

Multiple Choice

Suppose that at the price dollars the demand for a product is inelastic. If the price is increased, what will happen to revenue?

• A) increase
• B) decrease
• C) stay the same

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Definitions:

John Maynard Keynes

A British economist whose theories on the causes of prolonged unemployment and the importance of governmental fiscal and monetary policies founded Keynesian economics.

Federal Budget Deficit

The shortfall that occurs when the U.S. government's expenditures exceed its revenues within a fiscal year.

GDP

Gross Domestic Product, or GDP, represents the overall market value of all ultimate goods and services manufactured domestically in a specific timeframe.

Interest Rates

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage of the total amount loaned or deposited.