What controls the price that natural monopolies charge so that it will be a "fair price"?
A. Consumers
B. Competition
C. Regulatory boards
D. Patents
Answer: C
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Suppose you have a fixed-rate mortgage with a nominal interest rate of 6% and the expected annual inflation rate over the life of the mortgage is 2%. What is the expected real interest rate?
A) 3% B) 4% C) 8% D) 12%
Using prices to promote efficiency in the utilization of bridges,
A. higher prices should be charged for the use of the most crowded bridges. B. lower prices should be charged for the use of the uncrowded bridges. C. traffic would be equalized among the bridges where space is a scarce resource. D. All of the responses are correct.
The essential functions of any central bank are:
A. managing the money supply, and acting as a lender of last resort. B. overseeing major business transactions, and managing the money supply. C. preventing the formulation of monopolies or other market failure, and acting as a lender of last resort. D. collecting taxes, and managing the supply of money.
Briefly explain why a rise in national production and income per capita might improve some environmental problems such as air pollution, water pollution, and sanitation, and potentially worsen others.
What will be an ideal response?