Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is
A) 0.60.
B) 1.40.
C) 1.66.
D) 6.00.
A
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To implement the Friedman rule for long-term monetary policy, the monetary authority would need to set the
A) inflation rate equal to zero. B) nominal rate of interest equal to zero. C) real rate of interest equal to zero. D) money growth rate equal to zero.
The Bureau of Labor Statistics' U-1 measure of joblessness includes only very long-term unemployed
a. True b. False Indicate whether the statement is true or false
Suppose that a bank has $500 million in asset X, $400 million in asset Y, and $200 million in asset Z. Each asset has a different risk weight. The risk weight for asset X is 40%, the risk weight for asset Y is 70%, and asset Z has zero risk. The amount of risk-weighted assets for this bank is ____________ million. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets,
the bank must hold _____________ million in capital. A) $480; $38.4 B) $1,100; $88 C) $1,100; $880 D) $340; $27.2
Which of the following statements is positive?
A. When the Federal Reserve increases the money supply, interest rates decrease. B. Large budget deficits should be avoided. C. A tax cut that benefits low-income households is acceptable. D. Higher taxes are needed to support education.