A natural monopoly occurs when a monopoly:
A. exists because the monopolist can produce a good at a lower cost than anyone else.
B. exists because significant economies of scale are present.
C. achieves a naturally efficient allocation of resources.
D. is created by the federal government.
Answer: B
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The person or firm that pays a tax bears the burden of the tax
Indicate whether the statement is true or false
Assuming no change in the nominal exchange rate, how will a decrease in the price level in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The real exchange rate will be unaffected. C) The real exchange rate will fall. D) The impact on the real exchange rate cannot be predicted.
Which of the following statements is true?
a. A political business cycle is one created by the incentive for politicians to manipulate the economy to get re-elected. b. Adaptive expectations theory argues that the best indicator of the future is recent information. c. Incomes policies tend to be ineffective over time. d. Incomes policies include jawboning, wage-price guidelines, and wage-price controls. e. All of these.
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds and monetary base in the context of the Three-Sector-Model? a. The quantity of real loanable funds rises and monetary base rises
b. The quantity of real loanable funds rises and monetary base falls. c. The quantity of real loanable funds falls and monetary base falls. d. The quantity of real loanable funds and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.