The SAT (Scholastic Aptitude Test) is often used as a signaling device by colleges to find high- qualified students
High scores on this test can certainly communicate a lot of other qualities about a student that may make it an efficient sorting device. However, can you think of any reason why at least occasionally a high score might not signal the correct information?
Since students are well aware that colleges and universities rely heavily on SAT scores they are likely to spend quite a bit of time, effort and money to earning high scores. In other words, since a lot of effort is expended on this one instrument it might not necessarily reflect on the overall quality of the student.
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A supermarket sells you a pound of coffee on the condition that you buy a gallon of milk. This is an example of
a. Bundling b. Tie in Sale c. Price Discounting d. Both a and b
If real GDP decreased by 1% and nominal GDP increased by 2%, then output:
a. increased and the price level increased. b. increased and the price level decreased. c. decreased and the price level increased. d. decreased and the price level decreased.