The Joneses Are Interested in Purchasing New Carpet for Their

question 3

Multiple Choice

The Joneses are interested in purchasing new carpet for their family room and note an ad in the paper from Carpet World for carpet at $9.99 per square yard,with pad,fully installed.When the Joneses go to Carpet World,the salesman tells them there is a handling fee of $2.99 per square yard on the advertised special,but he can show them a better carpet for $14.99 per square yard.Which of the following statements is true?

• A)Since the Joneses are free to leave and buy elsewhere, there are no FTC violations by the ad.
• B)If the Joneses choose the $14.99 carpet, there is no violation of FTC regulations.
• C)Carpet World's ad and tactics constitute bait and switch.
• D)none of the above

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Definitions:

Total Reserves

The sum of a bank's deposits held in the central bank plus its cash on hand, serving as a buffer against potential withdrawals.

Lend Reserves

The practice by financial institutions of providing loans out of their reserves, often influencing the money supply in the economy.

Money Supply

All monetary resources that are accessible in an economy at a particular timeframe, including but not limited to cash, coins, and the deposits in checking and savings accounts.

U.S. Government Securities

Financial instruments issued by the U.S. Department of the Treasury, including bonds, notes, and bills, used to fund federal government activities.