For a given decrease in demand, the effect on price is smallest ...

[nramada]

For a given decrease in demand, the effect on price is smallest and the effect on quantity exchanged largest when:
 a. supply is perfectly elastic.
 b. supply is elastic.
 c. supply is unit elastic.
 d. supply is perfectly inelastic.

Question 2

An expansionary monetary policy is likely to increase real output more than just temporarily:
 a. when actual output currently is beyond the economy's long-run capacity.
  b. when the economy currently is at full employment.
 c. when the economy currently operates at less than capacity.
 d. at virtually any output level.

[sarahccccc]

Answer to Question 1

a

Answer to Question 2

c