To protect themselves from the effects of inflation, lenders try to estimate the expected rate of inflation.
Answer the following statement true (T) or false (F)
True
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Perfect Shots is company specializing in wedding photos and they have a fixed advertising budget. Perfect Shots advertises on the radio and the television and it costs $5,000 per unit of radio advertising and $14,000 per unit of television advertising. At their current advertising levels, the marginal benefit from radio advertising is $4,800 and the marginal benefit from television advertising is
$14,250. To optimally allocate their advertising budget, Perfect Shots should ________. A) decrease the amount of advertising in radio and television B) increase the amount of advertising in radio and decrease the amount of advertising in television C) decrease the amount of advertising in radio and increase the amount of advertising in television D) increase the amount of advertising in radio and television
An improvement in technology will shift the production possibilities curve
A) to the left. B) along the curve. C) inward. D) to the right.
We benefit from trade if we are able to obtain a good from a foreign country by giving up more of other goods than we would have to give up to obtain the good at home
a. True b. False Indicate whether the statement is true or false
When inflation causes relative-price variability,
a. consumer decisions are distorted and the ability of markets to efficiently allocate factors of production is impaired. b. consumer decisions are distorted, but markets are still able to efficiently allocate factors of production. c. consumer decisions are not distorted, but the ability of markets to efficiently allocate factors of production is impaired. d. consumer decisions are not distorted and markets are still able to efficiently allocate factors of production.