The basic human tendency to overvalue recent experience when trying to predict the future is called:
A. the recency effect.
B. tulip mania.
C. the leverage effect.
D. herd instinct.
Answer: A
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Which of the following is a name for when a bank promises to lend funds to a borrower to pay off its commercial paper?
A) loan commitment B) standby letter of credit C) securitization D) loan sale
In a monopolistically competitive market if the additional revenue generated from advertising equals the additional cost of advertising, the firm should
A) advertise more to increase sales. B) advertise more to lower marginal costs. C) maintain its current amount of advertising. D) advertise less to decrease costs.
According to the concept of comparative advantage, a good should be produced in that nation in which
A) domestic opportunity cost is greatest. B) domestic opportunity cost is the smallest. C) money is used. D) terms of trade are maximized.
The law of diminishing marginal utility implies that the marginal utility of my fifth waffle is less than the marginal utility of my friend's second waffle, other things constant
a. True b. False