Which of the following statements is true?
A) A natural monopoly always arises from government intervention in the market.
B) An increase in consumer demand can change a natural monopoly into a multi-seller market.
C) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces an upward sloping market demand curve.
D) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces a horizontal market demand curve.
B
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
When consumption expenditure is ________ disposable income, saving is ________
A) greater than; positive B) equal to; positive C) less than; positive D) less than; negative E) equal to; negative
Brady, a farmer, exchanges three bushels of apples for two pairs of shoes made by Jeff, a cobbler. We can say that Brady and Jeff are parts of a: a. barter economy
b. capitalistic economy. c. socialistic economy. d. mixed economy.
Under the adaptive expectations hypothesis, which of the following is the most likely long-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output