Governments choose to mandate participation in a program, like auto insurance, when:
A. the market would exist illegally.
B. the market would not otherwise exist.
C. the functioning of those markets is thought to be in the public interest.
D. None of these statements is true.
Answer: C
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The problem with adopting a normal profit pricing policy for a natural monopoly is that ________.
A. profits will be positive B. losses will be large and sustained C. it is not allocatively efficient D. it is allocatively efficient
If investors expect interest rates to fall significantly in the future, the yield curve will be inverted. This means that the yield curve has a ________ slope
A) steep upward B) slight upward C) flat D) downward
In a fixed exchange rate system, rates are maintained by the central bank's ongoing purchases and sales of currencies
a. True b. False
If scarcity didn't exist, neither would
A) rationing devices. B) competition. C) labor. D) capital. E) a and b