Governments like to know the price elasticity of demand because it helps them determine how changes in sales tax rates will affect:
A. tax revenues.
B. government spending.
C. income.
D. profits.
Answer: A
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However, there is a difference in the reasons why the labor demand curve slopes downwards. What is this difference?
When interest rates fall, a bank that perfectly hedges its portfolio of Treasury securities in the futures market
A) suffers a loss. B) experiences a gain. C) has no change in its income. D) may either gain, lose or see no change in its income.
The rule of 70 estimates how long it will take a country to:
A. double its real GDP per capita. B. achieve zero inflation. C. reach its maximum production capacity. D. double its output.
Suppose that a nation has adopted a fixed exchange rate with another country, and has a persistent trade deficit. What is most likely to happen?
a. a gradual increase in the value of its currency b. a gradual decrease in the value of its currency c. a "run" on its currency and a sudden appreciation d. a "run" on its currency and a sudden devaluation