All of the following are true regarding flexible exchange rates except
A. Exchange rate movements alter relative prices and may disrupt import and export flows.
B. The quantity of foreign exchange demanded equals the quantity supplied.
C. Some people are hurt while others are helped by exchange rate movements.
D. Speculators typically push exchange rates away from the long-term equilibrium.
Answer: D
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If the percentage change in the quantity of teapots demanded is greater than the percentage change in the price of teapots, then
A) the price elasticity of demand for teapots is greater than 1 in absolute value. B) the demand for teapots is unit elastic. C) the price elasticity of demand for teapots is less than 1 in absolute value. D) the price elasticity of demand for teapots is equal to zero.
The world rate of population growth is closest to
(a) 1%. (b) 2%. (c) 3%. (d) 4%.