If the short-term own price elasticity for transportation is estimated to be ?0.6, then long-term own price elasticity is expected to be:
A. greater than ?0.6.
B. ?0.6.
C. less than ?0.6.
D. neither greater than, less than, nor equal to ?0.6.
Answer: C
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Suppose an economy can be described by the consumption function C = 75 + 0.80YD and I = $50. What is the multiplier?
A. 5. B. 0.20. C. 1.25. D. 0.80.
Use the graph below to identify the efficiency loss when there is underproduction (Q1) and the efficiency loss when there is overproduction (Q3) in a market
The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent.
Refer to the above information. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans and deposits could have been expanded by a maximum of:
A. $40,000
B. $100,000
C. $200,000
D. $300,000
The demand for money is ________ related to the nominal interest rate
A) positively B) negatively C) not D) None of the above answers is correct because the relationship between the demand for money and the nominal interest rate changes with the inflation rate.