When economists look at the percentage change in quantity demanded for air travel generated by a change in income, they are looking at the
a. price elasticity of demand for air travel
b. income elasticity of demand for air travel
c. price elasticity of demand for airline tickets
d. cross elasticity of demand for airline tickets
e. cross elasticity of demand for airline travel
B
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The foreign exchange market is
A) a market in which exchange rates are allowed to fluctuate in the open market in response to changes in supply and demand. B) the increase in the exchange value of one nation's currency in terms of an other nation. C) a market in which households, firms, and governments buy and sell national currencies. D) the decrease in the exchange value of one nation's currency in terms of another nation.
Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand and to output? What might the president and Congress have to do to keep output stable?