If a good has a price elasticity of demand of -3, it implies that:
A) if the income of the consumer increases by 3%, the quantity demanded of that good will increase by 1%.
B) if the income of the consumer increases by 1%, the quantity demanded of that good will increase by 3%.
C) if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%.
D) if the price of the good increases by 3%, the quantity demanded of the good will increase by 1%.
C
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If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange-rate risk by ________ foreign exchange futures ________
A) selling; short B) buying; long C) buying; short D) selling; long
Checking exchange rates, you find $1 equals 0.75 euros. Then the price of 1 euro is
A) $0.25. B) $0.75. C) $1.33. D) $4.30.
If there is an outward shift in U.S. demand for French goods, the result will be
A) a decrease in the dollar price of a euro. B) an inward shift in French demand for U.S. goods. C) a decrease in euros traded. D) an increase in the dollar price of a euro.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.