You know that a candy bar cost five cents in 1962 . You also know the CPI for 1962 and the CPI for today. Which of the following would you use to compute the price of the candy bar in today's prices?
a. five cents (1962 CPI / today's CPI)
b. five cents ((today's CPI - 1962 CPI)/1962 CPI)
c. five cents (today's CPI / 1962 CPI)
d. five cents today's CPI - five cents 1962 CPI.
c
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Suppose a 10 percent increase in the price of textbooks decreases the quantity demanded by 20 percent. The elasticity of demand for textbooks is
A) 0.2. B) 2.0. C) 5.0. D) 10.0.
Smart cards will not much affect the demand for money if
A) the money supply is defined to include smart card balances. B) the money supply is defined to exclude smart card balances. C) the balance of the smart card is not considered to be electronic money. D) the reserves of the card issuing institution fall when the smart card is "loaded" with funds from an account the customer already has at that institution.