A positive value for the cross elasticity of demand between two good implies that these two goods are substitutes.
Answer the following statement true (T) or false (F)
True
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The inflation rate for 2007 is computed by dividing (the CPI in 2007 minus the CPI in 2006) by the CPI in 2006, then multiplying by 100
a. True b. False Indicate whether the statement is true or false
When the demand for a product decreases but the supply of the product remains unchanged,
A. the price of the product will rise and quantity will decrease. B. the price of the product will be unaffected. C. the price of the product will fall and quantity will remain the same. D. the price of the product will fall and the quantity will fall.
Refer to Figure 6.3. If the market is in equilibrium, the total surplus is:
A. area ABC. B. area BCD. C. zero. D. area ACD.
Assume that the current one-year rate is 3% and the two-year rate is 5%. Given this information, the one-year rate expected one year from now is
A) 5%. B) 6%. C) 7%. D) 9%. E) 12%.