Which of the following statements about elasticity measures is true?
A. Elasticities are always positive values.
B. Values that are close to zero indicate greater responsiveness.
C. Values that are further from zero indicate greater responsiveness.
D. Values that are further from zero indicate less elasticity.
C. Values that are further from zero indicate greater responsiveness.
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The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases,
A) the Fed sells dollars to increase the supply of dollars and maintain the exchange rate. B) the Fed conducts persistent intervention on one side of the market. C) the Fed buys dollars to increase the supply of dollars and maintain the exchange rate. D) the Fed buys dollars to decrease the supply of dollars and maintain the exchange rate. E) the Fed sells dollars to decrease the supply of dollars and maintain the exchange rate.
In which of the following examples cited in the text is there the least amount of evidence of the potential for input substitution?
A) Automobile production. B) Pipe organ production. C) French fry production. D) Production of health care services.