Explain what happens to the magnitude of price elasticity of demand as price increases along a straight-line demand curve
Price elasticity is the ratio of percentage change in quantity to the percentage change in price. One form of the formula is [(change in Q)/(change in P)] [P/Q]. Since slope of a straight line is constant, only P/Q changes. As P increases, Q decreases, so P/Q increases. Thus, elasticity increases (in absolute value).
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In a balance of payments statement, the current account plus the financial account must equal the capital account
Indicate whether the statement is true or false
Compared to Latin America in the 1980s, East Asian countries in the 1990s had
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a. True b. False Indicate whether the statement is true or false