Jeans in general have fewer close substitutes than a specific brand of jeans. Therefore, the demand for jeans in general will be ________ than the demand for a specific brand of jeans.
A. less inelastic
B. less elastic
C. more unit elastic
D. more elastic
Answer: B
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Hyperinflation typically ________
A) describes periods of extreme price increases of over 50% per month or 1,000% per year B) is a result of extreme periods of money growth that tend to come from large fiscal imbalances C) affects both poor and developed economies D) all of the above E) none of the above
Suppose the Fed increases the money supply. As a result of this, people deposit excess funds into their bank accounts, causing banks to have excess reserves
As a result, the banks lower the interest rates that they charge on loans, and investment rises, causing an increase in aggregate spending. This is known as a(n) A) direct effect of monetary policy. B) indirect effect of monetary policy. C) direct effect of fiscal policy. D) indirect effect of fiscal policy.
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in the United States rises 15 percent at a time when the Mexican price level is stable. According to the purchasing power parity theory, what will be the new equilibrium exchange rate?
A) $0.085 = 1 peso B) $0.13 = 1 peso C) $0.15 = 1 peso D) $0.115 = 1 peso E) none of the above
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.12 = 1 peso. Furthermore, suppose the price level in Mexico rises 25 percent while the U.S. price level remains constant. According to the purchasing power parity theory, what will be the equilibrium exchange rate?
A) $0.15 = 1 peso B) $0.09 = 1 peso C) $0.16 = 1 peso D) $0.096 = 1 peso