Because of an increase in the price of leather, the price of a pair of women's dress shoes increased 12 percent. If the price elasticity of demand for women's dress shoes is 0.85, which of the following will happen?
A) Total expenditure on women's dress shoes decreases.
B) The number of pairs of women's dress shoes demanded decreases by 10.2 percent.
C) Total revenue from the sale of women's dress shoes decreases.
D) none of the above
B
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If a firm accumulates unwanted inventories, then it
A) must hire more workers. B) will increase its production. C) has actual investment equal to its planned investment. D) will decrease its production. E) has actual investment that is less than its planned investment.
If the Fed buys government bonds through open-market operations, it will
A) increase the demand for bonds in the bond market. B) decrease the demand for bonds in the bond market. C) increase the supply of bonds in the bond market. D) decrease the supply of bonds in the bond market.