Spending a lot on advertising:
A. can act as a credible signal to consumers of high-quality products.
B. can act as a credible signal to producers to create high quality substitutes.
C. does not serve as a credible signal to consumers, since any producer can do it.
D. can act as a credible signal to consumers of low-quality products.
A. can act as a credible signal to consumers of high-quality products.
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The country with a comparative advantage in the production of a good has a
A) vertical production possibilities frontier. B) higher opportunity cost of production. C) horizontal production possibilities frontier. D) linear production possibilities frontier. E) lower opportunity cost of production.
When a commercial bank lends $1000 to a customer
A) M1 and M2 decline by $1000. B) M1 and M2 rise by $1000. C) M1 rises but M2 does not change. D) there is no change in M1 or M2 until the loan proceeds are spent.