If the cross-price elasticity of demand between two goods is 0,
a. a price change for one good will be exactly offset by a price change for the other
b. neither demand curve would shift following a change in the price of one of the goods
c. there is no income effect between the two goods
d. the demand for each good is price inelastic
e. the demand for each good is price elastic
B
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If the demand for a good is perfectly elastic, the price elasticity of demand is ________ and the demand curve is ________
A) infinite; vertical B) zero; vertical C) zero; horizontal D) infinite; horizontal
Inflation targeting has typically been accompanied by lower inflation
Indicate whether the statement is true or false
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in the United States rises 15 percent at a time when the Mexican price level is stable. According to the purchasing power parity theory, what will be the new equilibrium exchange rate?
A) $0.085 = 1 peso B) $0.13 = 1 peso C) $0.15 = 1 peso D) $0.115 = 1 peso E) none of the above
Based on the graph for the Gini Coefficient, as income inequality increases, Area A ______.
a. grows larger
b. grows smaller
c. disappears
d. divides into halves