If the price of a car in the United States is $26,000, and the exchange rate between the dollar and the British pound rises from $1.50 to $2.00 per pound, then the price of the American car in Britain will
A. rise.
B. remain the same.
C. fall.
D. be irrelevant, because the British government will impose restrictions on imports from the United States.
Answer: C
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If the price elasticity of demand for airline travel is 0.52 in the short run and 1.46 in the long run, then the demand for airline travel is ________ in the short run and ________ in the long run
A) elastic; elastic B) elastic; inelastic C) inelastic; elastic D) inelastic; inelastic
When the nominal interest rate rises, the
A) quantity of money demanded decreases. B) demand for money decreases. C) demand for money increases. D) quantity of money demanded increases.
A competitive market is in equilibrium. Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________, and the equilibrium quantity of cream cheese ________.
A) rises; decreases
B) rises; increases
C) falls; decreases
D) does not change; does not change
E) falls; increases
The GDP chain price index is designed to adjust nominal GDP for changes in:
a. the level of transfer payments. b. the quality of goods over time. c. the costs of economic bads such as pollution and crime. d. the general level of prices over time.