The downward slope of a demand curve
A) represents the law of demand.
B) shows that as the price of a good rises, consumers increase the quantity they demand.
C) indicates how the quantity demanded changes when incomes rise and the good is a normal good.
D) indicates how demand changes when incomes rise and the good is a normal good.
E) indicates how demand changes when the price changes and the good is a normal good.
A
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If the price elasticity is between 0 and 1, demand is
A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic.
Suppose the majority of the shares of Ford stock were sold to a Japanese firm. Assuming all else remains constant, this will
A) decrease net portfolio investment in the United States. B) increase foreign direct investment in the United States. C) increase the balance of the U.S. current account. D) create a capital outflow in the United States. E) increase the balance of the U.S. financial account.
If inflation is slow to change after an increase in the growth rate of spending, then:
A. real growth must decrease. B. real growth must increase. C. interest rates must decrease. D. interest rates must increase.
The real exchange rate is the:
A. rate at which two currencies can be traded for each other. B. nominal exchange rate adjusted for domestic inflation. C. price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency. D. quantity of foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market.