Given That the Own-Price Elasticity of Demand for a Brand

question 78

Multiple Choice

Given that the own-price elasticity of demand for a brand of shoes is -2,if the price rises by 8%,what will happen to the quantity of shoes demanded?​

• A)​It will decrease by 16%
• B)It will increase by 16%
• C)It will decrease by 1.6%
• D)​It will decrease by 1.6%

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Definitions:

Required Reserve Ratios

Regulatory requirements determining the minimum fraction of customer deposits that commercial banks must hold as reserves, rather than loan out.

Discount Rate

Discount Rate is the interest rate charged by central banks on loans they offer to commercial banks or the rate used to discount future cash flows to their present value.

Federal Reserve District Banks

Regional banks making up the Federal Reserve System, responsible for implementing monetary policy and banking regulations in their respective districts.

Member Banks

Banks that are part of a central bank system like the Federal Reserve System in the United States and are subject to its regulations and have access to its services.