If the price elasticity of demand is 2.5, then a 40 percent decrease in the price of the good will lead to a _______ percent increase in the quantity demanded
a. 22.5
b. 66.7
c. 150.00
d. 100.00
Answer: d. 100.00
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Refer to Table 4.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, what is the market quantity supplied at a price of $1?
A) 0 B) 1 C) 3 D) 5
Balance of payments crises under fixed exchange rates occur because of
A) government policies that are inconsistent with fixed exchange rates. B) punitive currency wars. C) global inflation and trade imbalances due to war. D) excessive exports and imports that overload the global system. E) monotonic expansion in global currency volume.
An exchange-rate system in which the nominal exchange rate is set by the government is known as
A) a flexible exchange-rate system. B) a floating exchange-rate system. C) a fixed exchange-rate system. D) an exchange-rate union.
What is the source of the demand for loanable funds in the open-economy macroeconomic model?