Economists assume that rational behavior is useful in explaining choices people make
A) because irrational people do not make economic choices.
B) because individuals act rationally all the time in all circumstances.
C) even though people rarely, if ever, behave in a rational manner.
D) even though people may not behave rationally all the time.
D
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Everything else remaining the same, in the foreign exchange market, which of the following increases the supply of U.S. dollars?
A) The U.S. interest rate rises. B) The U.S. interest rate differential increases. C) The expected future exchange rate rises. D) The European interest rate rises. E) The exchange rate falls.
Refer to Table 6-6. Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is
A) -14.8. B) -1.35. C) -0.74. D) -1.16.