Using antitrust law to split up an unregulated natural monopoly into several competing firms:
A. would reduce product price.
B. would increase product price.
C. might either increase product price or reduce product price.
D. will reduce average total cost.
Answer: C
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The growth of the Euromarkets resulted in
a. developing-country governments borrowing from European banks instead of American and Japanesebanks b. higher interest rates in Europe than in the U.S. and Japan c. a general trend toward substituting foreign aid for bank lending d. a general trend toward substituting bank lending for foreign aid e. none of the above
During World War II, the Fed in effect relinquished its control of monetary policy through its policy of
A) continually lowering reserve requirements. B) continually raising reserve requirements. C) pegging interest rates. D) targeting free reserves.
The principle of comparative advantage explains how
A. one nation can take advantage of another one through international trade. B. two nations may engage in mutually beneficial trade, even though one of them is more productive than the other. C. one individual can take advantage of another through international trade. D. some people are good at producing everything, while others have no comparative advantages. E. some nations end up with large trade surpluses.
Sales of government securities to banks ____ total and excess reserves and ____ the money supply.
A. increase; decrease B. decrease; increase C. decrease; decrease D. increase; increase