Advertising can enhance economic efficiency when it:
A. increases brand loyalty.
B. expands sales such that firms achieve substantial economies of scale.
C. keeps new firms from entering profitable industries.
D. is undertaken by pure competitors.
Answer: B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Dynamic tax analysis assumes that
A) an increase in a tax rate may lead to a decrease in the tax base. B) an increase in a tax rate will lead to an increase in the tax base. C) an increase in a tax rate will leave the tax base unchanged. D) the tax base will always remain unchanged.
If government taxes a firm which pollutes this will
a. increase the demand for the good produced. b. decrease the supply of the good produced. c. increase the equilibrium quantity of the good produced in the market. d. decrease the equilibrium price of the good produced in the market. e. all of the above.
Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2016 was ________ and to nominal GDP in 2016 was ________.
A. $80,000; $90,000 B. $80,000; $99,000 C. $80,000; $88,000 D. $90,000; $99,000