Suppose that the absolute price elasticity for cookies equals 0.8. We could then say that the demand for cookies is
A) elastic.
B) inelastic.
C) unit-elastic.
D) perfectly elastic.
Answer: B
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People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot
A) increase savings at the same time that a trade deficit grows. B) spend more than they earn. C) invest more than they save. D) have both current account and financial account deficits at the same time. E) increase their trade with other countries without increasing their savings.
When money prices are used to facilitate comparisons of value, money is said to function as a
A) unit of account. B) medium of exchange. C) store of value. D) payments-system ruler.
Which of the following are criticisms of voucher programs?
a. They do not allow government to exercise enough control over education finance. b. Exclusionary admission standards under a voucher program would be unjust. c. Vouchers might be used at sub-standard schools. d. all of the above e. b and c
Suppose currency traders believe that in the future, the United States will experience more rapid inflation than will Japan. The traders ______.
a. also believe that the U.S. dollar will soon appreciate in value b. will buy more U.S. dollars, pushing up the price c. holding U.S. dollars will convert them to yen, increasing the demand for yen d. also believe that Japanese consumers will soon demand more U.S. goods