Assume that demand decreases by 3 percent, the absolute value of price elasticity of demand is 1.0, and price elasticity of supply is 1.0. What is the percentage price change in this case?
What will be an ideal response?
Answer: -1.5
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A lender of the last resort refers to
A) a role of the central bank to prevent bank runs for temporary problems of liquidity. B) a role for the government to ensure that the central bank has adequate reserves. C) a reason for regulating banks. D) the need for market based regulations in the banking industry.
All of the following are arguments in support of protectionist legislation except:
A. increasing global trade. B. supporting infant industries. C. preserving domestic employment. D. promoting national security.
Price elasticity of demand is typically negative because
a. as price decreases, quantity demanded decreases b. as price decreases, quantity demanded increases c. as price decreases, demand decreases d. as price decreases, demand increases e. consumers rarely respond to a change in price
Government picking winners
A) is the market model. B) is the central planning model. C) can be done with really good data. D) none of these choices.