In a duopoly, if advertising only takes customers from rivals than attracting new customers, then
A) neither firm will advertise
B) there is no dominant strategy
C) the result is similar to the prisoners' dilemma
D) only one firm will advertise
C) the result is similar to the prisoners' delimma
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Which of the following best describes how banks create money?
A) Banks charge higher interest rates on loans than they pay on deposits. B) Banks charge fees for providing financial advice. C) Banks make loans from reserves. D) Banks create checking account deposits when making loans from excess reserves.
According to the real business cycle theory, the supply side shock from dramatic increases in oil prices in the 1970s led to higher unemployment because
A) when the real wage, W/P, fell, workers chose leisure. B) when the real wage, W/P, rose, workers chose leisure. C) workers increase Pe. D) None of the above.
Assume a simplified banking system subject to a 25 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000 . the money supply:
a. increases $100,000 b. increases $400,000. c. increases $125,000 d. decreases $500,000.
Which of the following will be an efficient payment scheme for a defendant's attorney, who is experienced in handling similar cases in the past?
a. Contingency fees b. Capitation fees c. Hourly billing d. Quality based billing