Consumers Confront a Barrage of Marketing Messages Each Day

question 62

Multiple Choice

Consumers confront a barrage of marketing messages each day. Banner ads on websites, billboards, and print media are some of the agents through which these messages are communicated to the consumers. However, most consumers "see" only a few of these messages and screen out the rest. This process of filtering out stimuli is known as _____.

• A) assimilation
• B) selective distortion
• C) attention
• D) selective exposure

Calculate real interest rates from nominal interest rates and inflation.

Understand the implications of changes in mortgage rates on the supply and demand for loanable funds.

Comprehend the role of investment tax credits in economic policy.

Explain the impact of fiscal policies on the loanable funds market.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flow given a specified rate of return.

Future Value

The value of an investment or a sum of money projected at a future date, calculated by applying interest or growth rates to the present value.

Time Value

The theory that a sum of money is more valuable if it's available immediately, rather than the same amount in the future, because of its earning capabilities.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, typically expressed on an annual basis.