In a market economy,
a. the government primarily determines the distribution of resources
b. prices determine the allocation of resources
c. what society produces is what it produced in the past
d. resource costs increase as specialization increases
e. absolute advantage is the primary determinant of resource allocation
B
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When calculating the arc elasticity of demand, the percentage change in price (quantity) should be based on the average of the starting and ending prices (quantities)
Indicate whether the statement is true or false
Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?
a. 1 percent b. 5 percent c. 10 percent d. 20 percent e. 0 percent