Macmillan Learning A positive demand shock will result from: a sudden increase in nominal wages. an increase in potential GDP. a move by the Bank of Canada to lower the interest rate. consumers and firms becoming more pessimistic.
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- Assume that in the market for credit cards there is some elasticity of supply and demand and that the equilibrium money price is 29%. Construct a market for credit cards showing the actual market price. Label initial supply and demand with subscript 1. Analyze the likely effect in the market for credit cards if state governments across the country impose a cap on credit card interest rate at 19%Suppose the income elasticity of demand for furniture is 3, and the income elasticity of demand for physician services is 0.3. A recession occurs in the global economy that reduces all consumers' incomes by 10%. Which of the following statements accurately describe the effect of the recession? Check all that apply. Purchases of furniture increase by 30%. Purchases of physician services decrease by 3%. Purchases of furniture decrease by 30%. Purchases of furniture decrease by 3%. Check Answer Save & Continue Continue without savingDemand for Orange Juice is given as Qd = 5000-2500 P + 1200 I +650E - 255 PS Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps= Rs 25. Find the Demand Equation. b. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs. 155. What will be the 'Price Elasticity of Demand at P = Rs.125? d Interpret the Elasticity of Demand calculated in (C) above.
- Imagine you are a bank manager. Currently, your bank holds $3 million in deposits at a 3% interest rate. However, you need to increase the total deposits to $6 million. The interest rate elasticity of savings is 1.70. What interest rate should you offer to depositors to obtain the required amount, all other things being equal? Use the midpoint method and round to two decimal places throughout your calculations.Best Buy sees its earnings drop in the early part of November and late October (before Black Friday sales). The cause for this drop is because future price is; to :: increase therefore current demand will :: decrease :: remain the same :: expected :: required :: unchangedThe Federal Reserve is expected to lower interest rates three to six months from now, creating expectations of a hotter housing market. The number of houses for sale in the market today will likely: rise. not change. fall. Obecome unpredictable.
- Own price elasticity of demand for vibranium has been estimated at 0.8. As a result a mining accident, quantity decreases 3%. What is the predicted percent change in price? In calculating changes, you may be tempted to use midpoints. Don't. Trust me. Round the percent change to two decimal places and do not enter the % sign. If you predict a 10.125% decrease in price, enter -10.13.) Correct Answer 3.75Suppose you are a skilled worker in America who makes barrels. This year you notice that more people than ever are buying barrels but the market price of barrels has gone down. Which of the following “shocks” can best explain this? Group of answer choices An increase in the demand for barrels. A decrease in the demand for barrels. An increase in the supply for barrels. A decrease in the supply for barrels.A - What is the shape of the demand curve if its elasticity is infinite?A) Parallel to the quantity axis B) Line exiting the originC) Isosceles hyperbola D) Parallel to the price axis E) Bell curveB - : What is the elasticity of a linear demand curve drawn parallel to the quantity axis?A) 2 B) infinite C) -1 D) 1 E) 0 C - : If aggregate demand increases in an economy while aggregate demand is constant in the short run, which of the following statements is correct for the new equilibrium point?A) price decreases national income increases B) price increases national income increasesC) price increases and national income does not changeD) price goes up and national income goes downE) price decreases and national income decreases.
- Demand for Orange Juice is given as Qd = 5000 – 2500 P+ 1200 I+ 650 E- 255 Ps Suppose Income isl = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. a. Find the Demand Equation. b. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. c. What will be the 'Price Elasticity of Demand' at P = Rs.125? d. Interpret the Elasticity of Demand calculated in (C) above.Your company sells wristwatches in three separate markets: China, Japan and Korea. The demand curves are 9c = 50 9j = 75 - - qk 100 4 2 Pc P₁ · Pk. a) Calculate and plot the inverse demand curve for each market. b) Calculate your aggregate demand curve. c) Calculate and plot your inverse aggregate demand curve.If both imports and exports rose, O aggregate demand (AD) would decrease. Oaggregate demand (AD) would increase. aggregate demand (AD) would decrease if exports rose more than imports. aggregate demand (AD) would increase if imports rose more than exports. aggregate demand (AD) would increase if exports rose more than imports.