In a market where all goods are perfect substitutes for each other,
a. the price elasticity of demand is 1.0 for all goods
b. the market is perfectly competitive
c. only one producer dominates
d. only a few firms can operate
e. brand loyalty is high
B
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Let if be the interest rate being paid on a foreign bond, and let i be the interest rate being paid for a domestic bond; let P be the price of the domestic bond and let Pf be the price of the foreign bond. If exchanges rates are fixed and the bonds are equal in terms of risk:
A. if = i. B. the expected return from the foreign bond = the expected return from the domestic bond. C. P = Pf times units of domestic currency/unit of foreign currency. D. all of the answers given are correct.
Which of the following government actions can hinder the economic development of a country?
A. It inhibits the growth of the financial and banking sector. B. It implements policies that increase inflation rates in a country. C. It adopts policies that effectively tax exports. D. All of these are correct.