- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 12. Introduction to Financial Statement Modeling
- Subject 4. Modeling Inflation and Deflation
CFA Practice Question
Which of the following is most likely a reason for a product's demand to be negatively affected by an increase in price?
A. Inflation
B. Price elasticity of demand
C. Exporting
Correct Answer: B
When the price elasticity of demand is elastic, a slight price increase will significantly decrease its demand.
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