Economic growth could make a country worse off
Indicate whether the statement is true or false
TRUE
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In the economic way of thinking, the costs of a recession are predominantly
A) the costs of using money. B) the excessive costs of advertising in the face of persistent, falling demand. C) the costs of disappointed expectations and discoordination of plans. D) the costs associated with high nominal interest rates.
Recessionary gaps are most likely to be accompanied by
A. inflation. B. inventory reductions. C. unemployment. D. expanding output.
Medicaid is the most expensive program that the government runs that provides benefits to the poor.
A. True B. False C. Uncertain
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $1,500 and a unit of advertising on the radio costs $4,500. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,750 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers and on the radio. B) To maximize profits, Franco's should increase the amount of advertising in flyers, but not change the amount of advertising on the radio. C) Franco's is currently maximizing its profits from advertising. D) To maximize profits, Franco's should decrease the amount of advertising in flyers and on the radio.