Explain how the following will affect the relative values of the dollar and the English pound
a. Income growth is higher in the United States than in England.
b. Inflation is higher in England than in the United States.
c. Real interest rates are higher in the United States than in England.
a. The dollar will depreciate relative to the pound.
b. The dollar will appreciate relative to the pound.
c. The dollar will appreciate relative to the pound.
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The “isms”
The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price
A) falls 4 percent. B) rises 4 percent. C) falls 2.5 percent. D) rises 2.5 percent. E) rises 0.25 percent.
Which of the following statements is true?
A) Positive economics deals with issues that are subjective. B) Normative statements depend on personal preferences. C) Positive economics recommends what people ought to do. D) Normative economic statements can be confirmed or disproven.
Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative
Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________. A) increase; substitutes B) decrease; substitutes C) increase; complements D) decrease; complements