Bob in Burnaby Called Ed in Toronto and Offered to Sell

question 162

Multiple Choice

Bob in Burnaby called Ed in Toronto and offered to sell him 40 kilograms of smoked salmon at $15 per kilogram. He requested that Ed phone him back by noon the next day. That way, Bob could offer it to someone else if Ed wasn't interested. Instead of phoning, Ed sent a letter of acceptance, in which he said that he would have his agent pick up the fish. On these facts, which of the following is False?

• A) If using the mail was unreasonable, the acceptance could not be effective until it was received.
• B) If using the mail was unreasonable, the acceptance was effective when it was mailed.
• C) The place of formation of the contract, if there was one, was Burnaby if the use of the mails was unreasonable.
• D) The place of formation of the contract, if there was one, was Toronto if the use of the mails was reasonable.
• E) Although a response by phone was requested, a response by mail would be effective if received before noon the next day.

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Definitions:

Potential GDP

The highest level of Gross Domestic Product (GDP) an economy can sustain over a long period without increasing inflation, reflecting its full employment output.

Inflation

A widespread rise in prices and a decrease in the value of money.

Spending Multiplier

A concept in Keynesian economics that quantifies the effect of an increase in autonomous spending on the total economic output.

Potential Output

The highest level of economic output that can be sustained over the long term without increasing inflation.