Under what conditions would firms be likely to support an industry-wide advertising ban?
What will be an ideal response?
If advertising only takes share away from rivals, the firms in the industry are better off if advertising is banned. Yet, if advertising is not banned, their dominant strategy is to advertise. This Nash equilibrium of all firms advertising, however, does not yield maximum joint profits.
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A current account deficit can occur if ________, all else equal
A) net national savings equals zero B) net factor income from abroad equals zero C) net exports are negative D) net investment income is negative
What is the slope of the line in the figure above?
A) 0.75 B) -0.75 C) 1.33 D) -1.33 E) zero
Which of the following is not a consequence of the Fed changing the reserve requirement?
A) Changes in the ratio are easily incorporated into banks' routine management. B) Changes in the ratio effectively places a tax on banks' deposit taking and lending activities. C) Decreasing the ratio will increase excess reserves. D) Increasing the ratio will decrease the amount of reserves banks have to loan.
Critics of the World Bank's analysis of East Asian industrial policies argue that
A) even though growth was faster in the non-targeted industries than it was in the targeted ones, the policies were essential to overall economic growth. B) growth was faster in nearly every targeted industries than it was in the non-targeted ones. C) even though growth was the same in the targeted industries as it was in the non-targeted ones, they would have grown slower without the policies. D) growth was slower in the targeted industries; hence the policies did not work.