A central bank that is buying its own currency might be trying to ________
A) weaken its currency
B) increase the domestic money supply
C) reduce domestic interest rates
D) reduce inflation
D
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We may be tempted to determine the optimal level of advertising expenditures at the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one)
In general, this rule will not allow the firm to maximize profits because it ignores the: A) price elasticity of demand. B) marginal cost of additional sales generated by the advertising. C) advertising-to-sales ratio. D) fixed costs of advertising.
Which of the characteristics of perfect competition assures that economic profit will be zero in the long run?
a. Each firm is small relative to the market. b. Each firm has access to perfect information. c. Goods produced in the market are homogeneous. d. Each firm is a price taker. e. There is easy entry and exit in the market.
Since 1980, changes in the nature of both the M1 and M2 money supply have
a. increased their reliability as indicators of monetary policy. b. decreased their reliability as indicators of monetary policy. c. had no effect on their reliability as indicators of monetary policy. d. decreased their reliability as indicators of fiscal policy.
Suppose consumer tastes and preferences shift from pizza to tacos. In the short run, these changing tastes will result in pizza restaurants ________ pizza prices and taco restaurants ________ taco prices.
A. increasing; decreasing B. decreasing; increasing C. decreasing; decreasing D. increasing; increasing