An increase in interest rates will cause investment to
A) increase.
B) decrease.
C) not change.
D) move erratically, depending on the interest rate effect on saving.
A
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If the ratio of net worth to vault cash is .2, the prime rate is .05, and the required reserve ratio is .25, the demand deposit expansion multiplier is
A) 2. B) 4. C) 5. D) .25.
If a firm is practicing third-degree price discrimination and is charging a price of $5 per unit to consumers in Group A and a price of $9 to consumers in Group B, which of the following is true?
A) Group A consumers are less responsive to price changes than Group B consumers. B) Group A consumers have a lower price elasticity than Group B consumers. C) Group B consumers have a greater price elasticity than Group A consumers. D) Group A consumers have a greater price elasticity than Group B consumers.