Compared to the 1980s, the Price of Computer Chips Is

question 232

Multiple Choice

Compared to the 1980s, the price of computer chips is much lower today and revenues from computer chips are _____ because demand is _____.

• A) higher; elastic
• B) lower; inelastic
• C) approximately unchanged; unit elastic
• D) higher; inelastic

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Definitions:

Fixed Exchange Rates

A government or central bank policy to maintain the country’s currency at a constant value relative to another currency or a benchmark.

Floating Exchange Rates

A currency valuation system where the value of a currency is determined by the foreign exchange market based on supply and demand relative to other currencies.

Gold Standard

A monetary system in which the value of currency is directly linked to gold, whereby currencies can be exchanged for a specific amount of gold.

Deflation

Deflation is an economic condition characterized by a general decrease in prices of goods and services, often indicating a reduction in the supply of money or credit.