Because Consumers Are Generally More Sensitive to Price Increases Than

question 132

True/False

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

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Definitions:

Net Capital Outflow

The contrast between the investments made by citizens in foreign assets and those made by non-citizens in the nation's assets.

Domestic Investment

The commitment of resources by a country to invest in capital within its own borders.

Saving

The act of setting aside money for future use, rather than spending it immediately, often for specific goals or emergencies.

Nominal Exchange Rate

The rate at which one country's currency can be traded for another's, not adjusted for inflation differences between the two countries.