Odd pricing became common in the late 19th century. Although the origins of odd pricing are uncertain, several explanations for the practice have been given. Which of the following is one of these explanations?
A) Odd pricing began in an era when it was difficult for owners and managers of firms to determine the marginal cost of the goods and services they sold. Odd prices were rough estimates designed to cover costs plus earn firms a profit.
B) Odd pricing was begun in England in the 1700s when America was part of the British Empire. Members of the British Royal Court were given the task of pricing products. After independence, merchants in the United States carried on the practice of odd pricing.
C) After the passage of the Sherman Act in 1890, merchants used odd pricing as a means of avoiding prosecution for antitrust violations.
D) Odd pricing forced employees to give customers change. This made it more likely that employees would record sales rather than pocketing their customers' money.
Question 2
Using the market for loanable funds, which of the following has the potential to raise the real interest rate?
A) an increase in the supply of loanable funds
B) an increase in the quantity of loanable funds demanded
C) an increase in the quantity of loanable funds supplied
D) an increase in the demand for loanable funds