Demand is said to be price inelastic when the coefficient of price elasticity of demand is
a. greater than +1
b. between 0 and +1
c. zero
d. infinity
B
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Security purchases in the United States by foreigners is
A) a credit item in the current account. B) a debit item in the capital account. C) a credit item in the capital account. D) a debit item in the current account.
A permanent negative supply shock causes stock prices to ________ than they would if the supply shock were temporary
A) fall more B) fall less C) rise more D) rise less
The interest rate on long-term bonds is somewhat higher than suggested by the expectations theory because
A) the expectations theory doesn't account for taxes. B) a risk premium exists. C) an inflation premium must be added to long-term bonds. D) the Fed can only control short-term interest rates.
If you deposit $500 cash into your account at a commercial bank. If it faces a 10 percent required reserve ratio, as a result of your deposit, the bank will:
a. have $450 of additional excess reserves. b. be capable of lending an additional $5,000. c. be capable of lending an additional $500 d. have $50 of additional excess reserves.