Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $9 to $7 is:

How are corporate profits taxed in the United States?

A) Earnings are taxed first by state sales taxes and then as corporate profits at the Federal level. B) Corporate profits are not taxed at all. C) Earnings are taxed first as personal income then as corporate profits at the Federal level. D) Earnings are taxed first as corporate profits then as personal income after dividends are paid.

The "expected real" interest rate is the

A) rate actually quoted in financial markets. B) rate actually quoted in financial markets minus the expected inflation rate. C) rate actually quoted in financial markets plus the expected inflation rate. D) rate actually quoted in financial markets divided by the expected inflation rate.