If the price elasticity of demand was 4.0 (in absolute terms), a ...

[Frost2351]

If the price elasticity of demand was 4.0 (in absolute terms), a 10 off sale would lead to:
 a. a 40 increase in purchases by customers.
  b. a 40 decrease in purchases by customers.
  c. a 2.5 increase in purchases by customers.
  d. a 2.5 decrease in purchases by customers.

Question 2

The equation of exchange states that:
 a. government spending = taxes plus the federal budget deficit.
 b. the reciprocal of the reserve requirement = the deposit expansion multiplier.
 c. the money supply times the velocity of money = the price level times the quantity of goods and services produced.
  d. the price level times the velocity of money = the money supply times the quantity of goods and services produced.

[jamesnevil303]

Answer to Question 1

a

Answer to Question 2

c