According to the Signalling Theory of Advertising,how Do Consumers Respond

question 22

Multiple Choice

According to the signalling theory of advertising,how do consumers respond to advertising

• A)They pay little or no attention to which firms advertise and which firms do not advertise.
• B)They are often more impressed by a firm's willingness to spend money on advertising than they are by the content of the advertisement.
• C)They are often more impressed by low-cost advertisements than they are by high-cost advertisements.
• D)They gain little or no information about product quality from advertisements.

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Definitions:

Loanable Funds

The money available in the financial system for lending to individuals, businesses, and the government.

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds in the market, bringing the financial market into balance.

Supply Curve

A graph showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to sell, generally depicted as upward sloping.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.