Which of the following is not true about advertising?
A. It raises the price of goods and services.
B. It creates brand loyalty.
C. It results in efficient allocation of resources.
D. It is a form of nonprice competition.
Answer: C
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Which of the following is likely to happen if the reserves held at the Fed by the private banks decrease?
A) Banks will make more loans. B) The M2 measure of money will decrease. C) The nominal interest rate will decrease. D) Labor demand will increase.
Refer to Figure 1A.1. If the hours worked per week are 20, the income per week is
A) 50. B) 100. C) 150. D) 200.
When there is a resource for which property rights are NOT well defined and there is a difference between private costs and social costs, then all but which of the following is a way to close the difference?
A. subsidization B. taxation C. regulation D. the free market system