If a regulator sets the price equal to the natural monopolist's marginal cost,
a. the monopoly will experience a loss
b. the monopoly will earn a profit
c. the monopoly will earn zero profit
d. consumers will be worse off than they would be if the firm's profit maximization activities were unregulated
e. the monopoly will be better off than it would be if its profit maximization activities were unregulated
A
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If companies decrease investment spending because of lower expected returns on projects, forecasters should anticipate (everything else the same) that
A) GDP will rise. B) the money supply will fall. C) interest rates will fall. D) saving will increase.
Automatic stabilizers stabilize the level of real GDP because:
a. Congress quickly changes spending and tax revenue. b. federal expenditures and tax revenues change as the level of real GDP changes. c. the spending and tax multiplier are constant. d. wages are controlled by the minimum wage law.
If the price level in any country increases by 15 percent during a year, then the price index for that year will be 85 as compared to the base year
a. True b. False Indicate whether the statement is true or false
The Keynesian-cross model suggests that increased saving increases the economy's output
a. True b. False Indicate whether the statement is true or false