When in 1985 a British pound cost approximately $1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker dollar, the same Shetland sweater would have cost
A) less than $130.
B) more than $130.
C) $130, since the exchange rate does not affect the prices that American consumers pay for foreign goods.
D) $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar.
B
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If soft drink brands are close substitutes for each other, this implies that the price elasticity for individual brands would be low.
Answer the following statement true (T) or false (F)
The stimulation of a large economy aimed at increasing growth in the rest of the world is commonly known as
A) pass-through effect. B) locomotive effect C) investment effect. D) domino effect.
Consider a demand curve that has a constant elasticity value of 0. What happens to quantity demanded and total revenue when price increases?
A) The quantity demanded and total revenue remain the same. B) The quantity demanded does not change but total revenue increases. C) The quantity demanded and total revenue fall to zero. D) The quantity demanded does not change but total revenue decreases.
Which of the following is considered investment?
A) Johnny buys a new car for his wife as an anniversary gift. B) James purchases a new car to replace an old car in his cab business. C) Maina purchases a new car for commuting to and from work. D) Jane purchases a new car for commuting to and from school.