Persuasive advertising influences demand by:
A. altering the underlying tastes of consumers.
B. providing information about the availability of a product.
C. offering reduced prices for the product.
D. none of the statements are correct.
Answer: A
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When the credit demand curve is relatively steep:
A) the quantity of credit demanded is relatively sensitive to changes in the tax rates. B) the quantity of credit demanded is not very sensitive to changes in the real interest rate. C) the quantity of credit demanded is relatively sensitive to changes in the real interest rate. D) the quantity of credit demanded is not very sensitive to changes in the tax rates.
A company facing the problem of moral hazard decided to lay off some workers during a recession, instead of lowering wages. What is the possible reason behind such a decision?
What will be an ideal response?