If Real Interest Rates in Canada Rose and Real Interest

question 41

Multiple Choice

If real interest rates in Canada rose and real interest rates in England fell,we would expect people to:

• A)buy relatively more Canadian assets
• B)increase their demand for British pounds
• C)borrow more from Canadian sources
• D)buy relatively more British assets

Identify factors influencing the elasticity of demand, including the categorization of goods as necessities or luxuries.

Analyze the implications of elasticity on firm’s revenue and pricing strategy.

Understand the concept of income elasticity of demand.

Differentiate between inelastic and elastic demand.

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