When price elasticity is less than -1, consumer spending increases as price falls.
Answer the following statement true (T) or false (F)
True
Rationale: This is the case where consumers are relatively responsive to changes in price -- which implies they will buy sufficiently more as price falls to cause consumer spending to increase.
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Supplier power tends to be higher when
a. Suppliers are concentrated b. There are high costs to switching between suppliers c. Both A&B d. None of the above
If the U.S. government went from a budget deficit to a budget surplus then
a. the interest rate and the real exchange rate would increase. b. the interest rate and the real exchange rate would decrease. c. the interest rate would increase and the real exchange rate would decrease. d. the interest rate would decrease and the real exchange rate would increase.
When the required reserve ratio is changed,
A. the money multiplier is changed but the amount of excess reserves in the banking system is unchanged. B. the money multiplier is unchanged but the amount of excess reserves in the banking system is changed. C. the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio. D. the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio.
Refer to Game Matrix V. Which of the following values of X and Y result in the only Nash Equilibrium being (Yes, Yes)?
Game Matrix V
The following questions refer to the game matrix below. Each firm has a choice of saying Yes or NO. The profits each gets depend upon which it chooses.
a. X = 21, Y = 9.
b. X = 19, Y = 11.
c. X = 21, Y = 11.
d. It is not possible for (Yes, Yes) to be a Nash Equilibrium.