If the Price Elasticity of Demand for Leisure Air Travel

question 150

Multiple Choice

If the price elasticity of demand for leisure air travel is −1.60 a _____ percent decrease in its price will cause a _____ in the amount of leisure air travel demanded.

• A) 10; 16 percent decrease
• B) 10; 16 percent increase
• C) 16; 10 percent increase
• D) 16; 10 percent decrease

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Definitions:

Exchange Rate Risk

The potential for losses due to fluctuation in the exchange rate between two currencies in international transactions.

Foreign Exchange Market

A global marketplace for trading currencies against each other, determining the exchange rate values between different currencies.

Currency Speculators

Investors who buy and sell foreign exchange with the aim of making a profit from changes in exchange rates, influencing currency values and economic conditions.

Spot Trade

A transaction for the immediate delivery of a currency, financial instrument, or commodity.