Imperfect information can be an entry barrier
Indicate whether the statement is true or false
T A perfectly able firm that has no history may be kept from winning needed financial backing by the costs of informing investors about its promising prospects.
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When consumers are less confident about their jobs or incomes, they are more likely to
A) reduce purchases of durable goods than nondurable goods. B) increase consumption spending and decrease investment spending. C) reduce purchases of nondurable goods and increase purchases of durable goods. D) increase investment spending and decrease consumption spending.
Explain the law of one price and the theory of purchasing power parity. Why doesn't purchasing power parity explain all exchange rate movements in the short run? What factors determine long-run exchange rates?
What will be an ideal response?