When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
A) inelastic.
B) elastic.
C) unit elastic.
D) perfectly inelastic.
Answer: A
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Indicate whether the statement is true or false
________ in the foreign interest rate causes the demand for domestic assets to shift to the right and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
Most economists believe that classical theory describes the world
a. in the short run. b. in the long run. c. in both the short run and the long run. d. in neither the short run nor the long run.
The defining features of business cycles is that they
A. are inherently bad B. represent the underlying trend of real GDP C. are fluctuations about trend of real GDP D. measure prospects for future growth in the economy