Author Question: For many goods, the price elasticity of demand increases over time after a price hike because A) ... (Read 70 times)

ec501234 · **on:** Jun 29, 2018

For many goods, the price elasticity of demand increases over time after a price hike because

A) consumer incomes tend to increase over time.
B) inflation increases all prices and incomes over time.
C) the ability to find good substitutes for the product whose price rose increases over time.
D) All of the above answers are correct.

Question 2

An inflationary gap is occurs when

A) real GDP is less than potential GDP.
B) real GDP exceeds potential GDP.
C) real GDP equals potential GDP.
D) the economy is at full employment.