A firm could be engaged in successful predatory pricing if:
a. It charged prices greater than the average variable cost of production.
b. It did not drive rivals out of the market
c. It did not raise its prices after its predatory price cutting.
d. None of the above is true.
d
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The rational expectations hypothesis indicates that a monetary policy designed to alter real Gross Domestic Product (GDP) will fail unless
A) changes in the money supply are completely anticipated. B) labor unions have long-term contracts. C) the government's budget is not in deficit. D) changes in the money supply are unexpected.
Traders operate on the principle that the ______ the value of the nominal exchange rate (E), the ______ it is to purchase foreign currency, and the _____ its return measured in the domestic currency.
A) higher; more expensive; lower B) higher; less expensive; higher C) lower; more expensive; higher D) higher; more expensive; higher