When is it a good decision to hire a celebrity endorser of your product?
What will be an ideal response?
It is a good decision when you expect your increase in sales to generate additional sales and profits, and is high enough to cover the endorsement fee.
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Which of the following statements is FALSE?
A) Saving helps create economic growth. B) Economic freedom requires property rights. C) Free international trade helps create economic growth. D) Improvements in quality of education are important for economic growth. E) Faster population growth is the key to growth in real GDP per person.
The Fed buys securities and gives the bank a check for the amount. After the check has cleared,
A) reserves remain unchanged because the increase of reserves at the bank are offset by an increase in reserves at the Fed. B) reserves have decreased by the amount of the check because the Fed pays for the check by decreasing the bank's deposits at the Fed. C) reserves have increased by the amount of the check because the Fed pays for the check by increasing the amount of the bank's deposits with the Fed. D) reserves have increased by the amount of the reserves multiplied by the required reserve ratio, and the quantity of money increases by the difference between the amount of the check and the increase in the reserves.
Which of the following is correct?
a. The Continental Congress used the inflation tax to help finance the American Revolution. b. The inflation is today a principal source of revenue for the U.S. government. c. There is no way a person can avoid the inflation tax. d. Governments can only raise revenues through taxation.
Refer to Figure 10.4. If the market was perfectly competitive, the consumer surplus would be:
A. $850. B. $625. C. $300. D. $100.