An individual firm desiring to obey the letter of the law while avoiding the effects of regulation may use
a. predatory pricing.
b. tit-for-tat strategies.
c. creative response.
d. collusion.
c. creative response.
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Intermediate targeting the money supply is preferable if there is a(n)
a. increase in the severity of supply shocks. b. unstable money demand function. c. low interest elasticity of money demand. d. difficulty in the measurement of money demand. e. none of the above.
A look at the historical data indicates that velocity for M1
a. has been more variable than the velocity for M2, but both have been fairly constant for the past 65 years. b. and M2 have both trended downward, but velocity for M2 has been more erratic than velocity for M11. c. has been fairly constant for the past 65 years, but velocity for M2 has trended downward. d. has trended upward in the past 65 years, but velocity for M2 has been more constant.
A transfer payment is a government payment
a. to companies that provide goods or services to government agencies. b. designed to transfer funds from one government agency to another. c. which transfers revenue from the federal government to state government. d. not made in exchange for a good or service.
You are responsible for purchasing 25 used cars for your company. Star Brand cars costs $7,500 and Diamond Brand cars cost $6,000. Based on experience, you believe that 20% of Star Brand cars are lemons (low quality) while 40% of Diamond Brand cars are lemons (low quality). You are willing to pay $5,000 for a known lemon and $12,000 for a known plum. Which brand do you purchase?
A. Star B. Diamond C. You are indifferent between brands. D. You don't buy either brand.