Don is convinced that it would be best if the U.S. was on a gold standard. He enthusiastically reads any editorials or articles that confirm his view. He frequently dismisses editorials and articles that argue against the gold standard because he
presumes they are flawed or written by "crackpots.". Don's behavior most clearly illustrates which of the following systematic mistakes that people make?
a. people are overconfident
b. people give too much weight to a small number of vivid observations
c. people are reluctant to change their minds
d. All of the above are correct.
Answer: c
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How does elasticity affect a company's pricing policy?
(A) If demand is unitary elastic, the company knows that a decrease in price would decrease total revenues. (B) If demand is unitary elastic, the company knows that an increase in price would increase total revenues. (C) If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues. (D) If demand is inelastic at the current price, the company knows that an increase in price would reduce total revenues.
Change in U.S. policy can lead to changes in inflationary expectations, interest rates, and exchange rates simultaneously as they all adjust to new equilibrium levels
Indicate whether the statement is true or false