1.

Supply of a product is perfectly price-inelastic. Its demand 'decreases'. This leads to fall in real national income. Other things remaining unchange. True or False ? Explain

Answer» Real national income measures GDP in real terms or only in terms of goods and services and not the prices. When the supply is perfectly inelastic, with a fall in demand only the price level will not the quantity demanded or supplied in the economy. Hence the given statement is false.


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