The sign on the income elasticity formula will be positive for inferior goods and negative for normal goods.
Answer the following statement true (T) or false (F)
False
The formula for income elasticity is the percentage change in quantity demanded divided by the percentage change in income. Normal goods will have a positive sign because the demand for them rises with more income, and inferior goods will have a negative sign because their demand falls when income rises.
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If the U.S. real exchange rate is 125, the U.S. price index is 140, and the Japanese price index is 165, what is the yen to dollar exchange rate?
A) 106.06 B) 125.65 C) 147.32 D) 184.80
Changes in which of the following factors do NOT shift the demand curve?
A) the price of the good B) buyers' incomes C) the price of a substitute good D) the number of buyers E) the price expected in the future
Which of the following assumptions is true of government spending and taxes?
a. They do not depend upon on the level of GDP b. They may be changed only through direct action by the Congress. c. They change only when the price level changes. d. They change only upon executive order by the president of the United States. e. They are autonomous at low levels of GDP but not at higher levels of GDP.
If the MPC = 0.9 and a household obtains $20,000 more dollars then how much would the household spend of the additional $20,000?
A. $20,000 B. $2,500 C. $17,500 D. $18,000