Other Economics Answers

Which one of the following statements with regards to price elasticity is correct?

A. If you know what the price elasticity of petrol is, all you will be able to say is that an increase in the price of petrol will reduce the quantity of petrol demanded.

B. If the price elasticity of good X is greater than the price elasticity of good Y, it means that households are more responsive or sensitive to a change in the price of good Y than to a change in the price of good X.

C. If you know what the price elasticity of petrol is, you will know how sensitive or responsive the quantity demanded of petrol is to a change in the price of petrol.

D. The price elasticity of demand provides us with a measure of how sensitive or responsive the price of a good or service is to a change in demand.

• If the price elasticity of beef is greater than the price elasticity of coffee, it means that households are A. more responsive or sensitive to a change in the demand for beef than to a change in the demand for coffee.
•  B. more responsive or sensitive to a change in the price of coffee than to a change in the price of beef.
•  C. more responsive or sensitive to a change in the demand for coffee than to a change in the demand for beef.
•  D. more responsive or sensitive to a change in the price of beef than to a change in the price of coffee.

• Price elasticity of demand gives us a measure of how sensitive or responsive the ________ of a good or service is to a change in the _________ of a good or service. A. demand; price
•  B. price; quantity demanded
•  C. price; demand
•  D. quantity demanded; price

explain and differentiate between a fixed budget and a flexible budget . state benefits of both the above type. illustrate your answer while differentiate both the above types

n autarky, what would be the equilibrium price of coffee, the quantity of coffee produced and the quantity of coffee consumed in Brazil?

4) What will happen if the United States and Malaysia continue to pursue the economic policies outlined in part (b) above, and the Malaysian central bank continues to take the action outlined in part (c)?

5) Suppose you are a trader in the foreign exchange market. How would you adjust your expectation of the ringgit's future dollar price (𝑒 𝑒 ) based on your answer in part (d What effect does this have on the foreign exchange market? Would it make the job of Malaysia's central bank simpler or more difficult? What is the reason for this?

1) Suppose that the US dollar and the Malaysian ringgit have a fixed exchange rate of $1/ RM4 and this exchange rate initially corresponds to equilibrium in the foreign exchange market. Draw and label a graph depicting the initial situation in the market for ringgitdenominated deposits. What conditions must be fulfilled in order for this market to be in equilibrium? Explain.

2) The United States is now pursuing an economic policy that raises the interest rate on dollar-denominated deposits (𝑖 $ ). Malaysia has an economic strategy that drives down the interest rate on ringgit-denominated deposits (𝑖 𝑅𝑀). Explain the effects of the two countries' policies using a graph as shown in part (a) above. What would have happened if the exchange rate between the dollar and the ringgit had been flexible rather than fixed? Why is this so?

3) What steps must the Malaysian central bank take if Malaysia sticks to its commitment to keep the exchange rate at $1/RM4? Please explain

What is trade balance