If the price elasticity of demand is 0.5, then a 10% increase in price results in a
A) 5% decrease in total revenues.
B) 5% decrease in quantity demanded.
C) 0.5% decrease in quantity demanded.
D) 5% increase in quantity demanded.
E) 50% reduction in quantity demanded.
Ans: B) 5% decrease in quantity demanded.
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Monetary Policy Shortcomings ?
The interest rate that banks charge one another for the loan of excess reserves is the ________.
A. discount rate B. interest on reserves C. federal funds rate D. prime rate
A cartel is likely to last longer if
A) more new firms enter the market. B) the profits of participating members are relatively stable. C) market prices vary more over time. D) there are more firms in the industry.
The most important job of the Federal Reserve is to ______.
Fill in the blank(s) with the appropriate word(s).