Answer:
b. A decrease in price of 2% causes an increase in quantity demanded of 0%.
Explanation:
By definition, the demand is said to be <em>perfectly inelastic</em> when no matter how much the price of a good changes, you will still be consuming the same exact amount as you did before the price changed.
Keeping this in mind, we know that the price may increase or decrease in 2%, but the demanded quantity will not have any change at all (people won't consume less or more).
So, now we know that the correct answer is <em>b, </em>because a decrease in price of 2% causes an increase in quantity demanded of 0% - in other words, people's purchase decision weren't influenced by the change in the price.
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C. Opening a bank.
Because your opening up an bank account, therefore you not using any kind of money, or credit. UNTIL you put something inside the account.
Answer:
The correct answer is 7%.
Explanation:
The real GDP of an economy is said to be increasing at an annual rate of 5%.
The inflation rate is kept low at 2%.
The velocity of money is assumed to be constant.
In this situation, the annual money growth rate will be equal to the sum of the inflation rate and rate of growth of real GDP.
Annual money growth rate
= Inflation rate + Real GDP growth rate
= 2% + 5%
= 7%
Answer:
1. The tax multiplier for this nation is -2.33
2. The tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 would be -3
3. Real GDP change will be of -$1,800 if the tax multiplier is-9 and taxes are reduced by $200
Explanation:
1. In order to calculate the tax multiplier for this nation according to the given data we would have to calculate the following formula:
tax multiplier for this nation=-MPC/1-MPC
tax multiplier for this nation=-0.7/1-0.7
tax multiplier for this nation=-2.33
The tax multiplier for this nation is -2.33
2. To calculate the tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 we would have to make the following calculation:
tax multiplier for this nation=real GDP/increase in taxes
tax multiplier for this nation=-$450/$150
tax multiplier for this nation=-3
The tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 would be -3
3. To calculate the amount of change will real GDP be if the tax multiplier is-9 and taxes are reduced by $200 we would have to make the following calculation:
tax multiplier=real GDP/increase in taxes
-9=real GDP/$200
real GDP=-9*$200
real GDP=-$1800
Real GDP change will be of -$1,800 if the tax multiplier is-9 and taxes are reduced by $200