Prices set too low can actually be against the public interest.
Answer the following statement true (T) or false (F)
True
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Think about each of the items in the list and explain how they affect incen-tives and might change the choices that people make:
What will be an ideal response?
Product differentiation is what allows monopolistically competitive firms to have some market power.
Indicate whether the statement is true or false.
Bans and quotas ________ in situations where it is difficult or costly for authorities to monitor and punish rule-breakers.
A. often succeed B. always succeed C. sometimes succeed D. rarely succeed