This topic contains a solution. Click here to go to the answer

Author Question: An important determinant of the price elasticity of supply is A) whether the good is a durable or ... (Read 118 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
An important determinant of the price elasticity of supply is
 
  A) whether the good is a durable or a nondurable.
  B) the time period firms have to adjust to a new price.
  C) how well consumers like the commodity.
  D) the proportion of the consumer's total budget spent on the good.

Question 2

Explain how the money market determines the equilibrium interest rate.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

underwood14

  • Sr. Member
  • ****
  • Posts: 346
Answer to Question 1

B

Answer to Question 2

The demand for money curve, MD, is downward sloping because as the interest rate decreases the quantity of money demanded increases. The supply of money curve, MS, is vertical at the quantity of real money. There exists only one interest rate for which the quantity of money demanded is equal to the quantity supplied. If the interest rate is above the equilibrium interest rate, so that there is an excess supply of money, people respond by buying bonds so that the interest rate falls. Likewise, if the interest rate is less than the equilibrium interest rate, so that there is an excess demand for money, people respond by selling bonds and the interest rate rises.




abarnes

  • Member
  • Posts: 556
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


jomama

  • Member
  • Posts: 346
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

For a complete list of videos, visit our video library