Assume the role of a defender of advertising. Describe the characteristics of advertising that enhance the effectiveness of markets and increase the social welfare of society
Advertising provides information to consumers and thus allows consumers to make more informed (and therefore better) choices. Advertising fosters competition by making consumers more aware of prices and product characteristics in a market.
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Higher levels of savings will result in all of following except: a. greater economic growth
b. higher capital formation. c. more consumption in the future. d. lower rates of investment.
A downward-sloping demand curve shows:
a. the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. b. the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. c. the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. d. the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases.
In an attempt to solve the problem of the overvalued dollar in the early 1970's, the United States
a. revalued the dollar, which made foreign exchange cheaper. b. decreased the price of gold in terms of the dollar. c. devalued the dollar, which made foreign exchange cheaper. d. devalued the dollar, which made foreign exchange more expensive.
According to the quantity theory of money, inflation is attributable to increases in:
A. the money supply in excess of increases in real GDP. B. velocity in excess of increases in real GDP. C. real GDP. D. velocity.