Empirical estimates of the price elasticity of demand [in Table 3.4] suggest that the demand for household consumption of alcoholic beverages is:

If the exchange rate is constant and U.S. exports increase, then in the foreign exchange market the

A) supply of U.S. dollars increases. B) demand for U.S. dollars increases. C) demand for U.S. dollars decreases. D) quantity of U.S. dollars demanded decreases. E) quantity of U.S. dollars demanded increases.

Stock prices may rise from a reduction in interest rates because:

A. financial market participants are less optimistic about future earnings. B. stockholders will expect lower future earnings. C. the present value of future earnings will decrease. D. consumer and business confidence about future growth improves.