What is a positive effect of advertising?
A. It promotes economic concentration in industry.
B. It reduces economic efficiency in the economy.
C. It provides information that reduces search costs.
D. It is designed to persuade rather than inform consumers.
Answer: C
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The federal funds rate is
A. The required reserve ratio that the federal reserve requires banks to maintain B. The interest rate that banks charge for loans to its important commercial borrowers C. The interest rate that banks charge each other for overnight loans
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.
Sarah's Bargain Store, a perfect competitor, made an economic profit of $20,000.
A. She is operating in the short run. B. She is operating in the long run. C. She may be either in the short run or the long run. D. There is no way to determine if she is operating in the short run or the long run.
If the supply of labor increases, which of the following events will occur?
A. The wage rate will increase and firms will increase employment up until the point where MRP equals the new wage rate. B. The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate. C. The wage rate will fall and firms will decrease employment to the point where MRP equals the new wage rate. D. The wage rate will fall and firms will increase employment up until the point where MRP equals the new wage rate.