If demand is inelastic, the percentage change in price is greater than the resulting percentage change in quantity demanded
a. True
b. False
A
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A strategy game is
a. any pricing competition among firms b. a situation arising from independent decision making among economic participants c. interpendent choice behavior by individuals or groups who share a common goal d. none of the above
Cost pull inflation occurs when the:
A. price of a key input increases suddenly. B. price level changes in response to changes in the business cycle. C. price of necessity goods increases suddenly. D. business cycle becomes sporadic and unpredictable.
How much is the interest rate on a bond that has a face value of $1,000, a selling price of $800, and pays $80 interest?
What will be an ideal response?
Assume you are an American importer who must pay 500,000 euros at the end of 60 days when you receive 1,000 cases of French wine at your warehouse in New York. If you do not hedge this transaction, you face exchange-rate risk. The best way to remove the risk of loss due to currency fluctuations is to
A. buy 500,000 euros in the forward exchange market for delivery in 60 days. B. invest the dollar equivalent of 500,000 euros in a dollar-denominated deposit at a French bank. C. sell 500,000 euros now in the spot market. D. sell 500,000 euros in the forward exchange market for delivery after 60 days.