Under oligopoly, if one firm in an industry significantly increases advertising expenditures to capture a greater market share, it is most likely that other firms in that industry will
A. pursue a strategy to reduce advertising expenditures to maintain profits.
B. decide to increase advertising expenditures even if it means a reduction in profits.
C. increase the price of the product to improve profits and then increase advertising expenditures.
D. make no changes in advertising expenditures because advertising is effective in the short run, but not the long run.
Answer: B
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The federal funds rate is the interest rate that ________ charge(s) ________.
A. banks; their best corporate customers B. the Fed; commercial banks C. banks; on federal student loans D. banks; other banks
When the Fed sells $100 million of securities to a commercial bank, the
A) monetary base increases. B) money supply increases. C) bank's reserves decrease. D) required reserve ratio decreases. E) bank's reserves do not change.
The precise increase in the money supply that is potentially generated by a change in demand deposits is determined by the
a. bank's excess reserves b. actual money multiplier c. legal reserve requirement d. FDIC e. ratio of good to bad loans made by the banking system
When the Times Mirror Company purchased the right to discharge 150 tons of hydrocarbons annually from other polluters, this was an example of
A. following an incentive-based regulation. B. following a command-and-control regulation. C. conducting a transaction between polluters typical of those that have been carried out since the early 20th century. D. an illegal transaction.