Firms pay celebrities to endorse their products because they believe this will increase the demand for these products.
a. true
b. false
a. true
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Barter can best be defined as:
a. the direct exchange of one good for money. b. the direct exchange of money for a good. c. the direct exchange of goods and services without the use of money. d. the direct exchange of labor services for wages. e. the payment of interest on a savings account.
Technological change that makes workers more productive should increase the demand for labor
Indicate whether the statement is true or false
When the government borrows funds in order to pay for its current expenditures,
a. the government will have to repay the borrowed funds within five years. b. the government can spend without having to increase taxes, either now or in the future. c. future taxes will have to be higher in order to pay the interest on the borrowed funds. d. the cost imposed on the private sector is virtually eliminated because taxes can remain constant.
Which of the following statements is incorrect?
A. Any central bank policy that influences the domestic interest rate will affect the exchange rate. B. A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates. C. Higher U.S. interest rates would likely result in an appreciation of the U.S. dollar. D. Sterilized changes in foreign exchange reserves alter a country's monetary base.