If the price of a good rises by 10% and the percentage increase in the total amount consumers spend on the good is 15%, then the good is
A. perfectly inelastic.
B. unit elastic.
C. inelastic.
D. elastic.
Answer: C
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The market value of downtown real estate is most basically determined by the
A) assessment of the taxing authorities. B) market value of the building already on a particular plot of land. C) use to which it is currently being put. D) uses to which people would like to put it if given a chance. E) whatever it costs to convert the land to its next best use.
If you are convinced that stock prices are impossible to predict from available information, then you probably also believe that
a. the efficient markets hypothesis is not a correct hypothesis. b. the stock market is informationally efficient. c. the stock market is informationally inefficient. d. there is no reason to establish a diversified portfolio of stocks.
Because local banks earn fees for each loan, their role to:
A. create not many mortgages perfectly aligns with their incentives. B. properly assess the risk of each borrower is perfectly aligned with their incentive. C. properly assess the risk of each borrower is misaligned with their incentive. D. provide mortgage loans only to those with low credit scores is misaligned with their incentive.
In Keynes's view, an excess quantity of money demanded causes people to:
A. sell bonds and the interest rate rises. B. buy bonds and the interest rate falls. C. buy bonds and the interest rate rises. D. increase speculative balances.