What could be a potential explanation for a firm selling virtually identical products under different brands?
A) Consumers are well informed about the quality of the products.
B) Consumers believe that the products' quality is similar and thus firms are able to price discriminate.
C) Consumers always favor private-label brands.
D) Consumers believe that the products' quality differs and thus firms are able to price discriminate.
D
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When exchange rates are fixed and the foreign nation's interest rate increases, what happens next?
A) The home nation's IS curve shifts out because of a depreciation and an increase in the trade balance. B) The home nation's LM curve shifts right, and its interest rate falls. C) Fixed exchange rates force the home nation to raise its interest rates. D) The home nation and the foreign nation are always in equilibrium, so no changes occur.
A decrease in the price of a firm's output
A) raises the value of marginal product of each unit of labor. B) shifts the firm's demand for labor curve rightward. C) results in the firm increasing the amount of output it produces. D) None of the above is correct.