Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Walmart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store,
often go out of business because they lose customers. This story demonstrates that
a. consumers are boycotting local retailers
b. Wal-Mart engages in illegal acts of monopolization
c. there are diseconomies of scale in retail sales
d. there are economies of scale in retail sales
e. Wal-Mart is managed by ruthless business people
D
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If the Federal Reserve System buys government securities from commercial banks and the public, then ________.
A. the money supply will contract B. commercial bank reserves will decline C. commercial bank reserves will be unaffected D. it will be easier to obtain loans at commercial banks
Which of the following is a true statement about equilibrium in the foreign exchange market?
A) Net exports are zero. B) The expected return on domestic assets is equal to the expected return on foreign assets. C) Foreigners wish to purchase the entire supply of domestic assets. D) The relevant central banks meet regularly to choose the equilibrium exchange rate.
Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:
a. inferior goods. b. substitute goods. c. Giffen goods. d. public goods. e. complementary goods.
Both the monetarist view of the economy and the simple quantity theory of money hold that velocity is constant
Indicate whether the statement is true or false