Consider a used car market in which half the cars are good and half are bad (lemons). A rational buyer in this market should
A) save up and buy a new car.
B) offer to pay a price equal to the most she would pay for a good car.
C) offer to pay a price equal to the most she would pay for a lemon.
D) offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon.
D
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One reason purchasing power parity does not exactly hold is that many goods are not traded internationally
Indicate whether the statement is true or false
Inflation targeting is a framework for carrying out monetary policy whereby
A) the central bank commits to a monetary growth rule. B) the central bank commits to achieving a publicly announced level of inflation. C) the central bank commits to achieving a target level of inflation which is never announced publicly. D) the central bank adopts a rigid target for inflation and ignores declines in output.
A firm's external financing need is met by:
a. debt or equity. b. owners' equity, including retained earnings. c. net working capital and retained earnings. d. net income and retained earnings. e. retained earnings.
In the cable TV service industry, end users are
A) advertisers only. B) cable TV subscribers only. C) both advertisers and cable TV subscribers. D) no one.