Author Question: Suppose the demand for a good is currently unit elastic over the relevant range. Then the producer ... (Read 31 times)

Mr3Hunna · **on:** Jun 30, 2018

Suppose the demand for a good is currently unit elastic over the relevant range. Then the producer of a substitute good goes out of business and stops producing it. As a result, demand over that range is now likely to be
a. Unit elastic.
b. Relatively elastic.
c. Relatively inelastic.
d. Perfectly inelastic.

Question 2

If the Fed raises the discount rate, it:
a. forces commercial banks to call in existing loans.
b. changes excess reserves into required reserves.
c. changes required reserves into excess reserves.
d. none of the above