Advertising, fads, and fashion are examples of influences on demand that are generally referred to as altering expectations about products.
a. true
b. false
Answer: b. false
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Which of the following statements is TRUE about the relationship among external, internal and social costs?
A) Social costs will always be higher than external costs. B) Social costs will always be higher than internal costs. C) Internal costs will always be higher than external costs. D) Internal costs will never equal external costs.
Consumers and producers face each other in the many markets of our economy, and in most of these markets,
a. price floors dominate b. price ceilings dominate c. market prices dominate d. government intervention is commonplace e. parity exists between the farm and nonfarm goods
Which of the following is an example of adaptive expectations?
a. James hears that many companies are laying off people and decides not to change his job at this time b. Kirsten reads about the continuous rise in the prices of necessary goods and the simultaneous rise in the level of unemployment and knows that the country is heading for stagflation. c. Kate knows that inflation is on the rise and that the best strategy for her firm would be to lower the price of its product. d. Peter knows that the Federal Reserve is planning to lower interest rates next month and decides to apply for a loan.
Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to
a. rise because net capital outflow and domestic investment rise. b. rise because national saving rises. c. fall because net capital outflow and domestic investment rise. d. fall because national saving falls.