Suppose a person calculates her permanent income by adaptive expectations. Last year's permanent income was 38,000, this year's actual income is 41,000, j = 0.30, and k = 0.86. What is her consumption expenditure this year?

If the demand curve for comic books is expressed as Q = 10,000/p, then demand has a unitary elasticity

A) only when p = 10,000. B) only when p = 100. C) always. D) never.

According to purchasing power parity, which of the following is FALSE about an overvalued dollar compared to the Japanese yen?

A) U.S. merchants would be motivated to import more Japanese goods. B) Japanese merchants would tend to export more to the United States. C) Prices in the United States would tend to fall. D) Over the long term, the exchange rate would fall.