The Use of Tying Contracts Was Prohibited by the Clayton

question 123

Multiple Choice

The use of tying contracts was prohibited by the Clayton Act of 1914 because these contracts

• A) required retailers to use false and misleading advertising.
• B) required retailers to purchase unwanted items in order to purchase desired items.
• C) forced households to buy wanted products in order to buy a desired product.
• D) forced competitors into price discrimination agreements.

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Definitions:

Time Preference

An individual's preference for receiving goods or services sooner rather than later, reflecting the value of future goods as compared to present goods.

Money Rate

Typically refers to the interest rate, which is the cost of borrowing money, or the return on investing money, expressed as a percentage.

Real Rate

The interest rate adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender.

Inflationary Premium

The part of the total interest rate that represents compensation to the lender for the expected loss of purchasing power due to inflation.