The reason that antitrust laws exist and are enforced is because most economists and politicians believe that
a. every industry should be perfectly competitive
b. monopolies do not maximize shareholder value in the long run
c. the price and quantity combinations delivered in a perfectly competitive market are both socially desirable and most efficient
d. monopolies use their market power to create economies of scale
e. small firms are the backbone of American society
C
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Why is it difficult to implement fiscal policies?
What will be an ideal response?
A change in real GDP divided by a change in investment is called the:
a. spending multiplier. b. demand multiplier. c. equilibrium multiplier. d. investment multiplier. e. spending multiplier
One News Wire article in the text has the title "Fed Cuts Key Interest Rate Half-Point to 1 Percent." The Fed has most likely reduced the:
A. Discount rate. B. Rate for purchasing bonds in the open market. C. Prime lending rate. D. Rate for foreign exchange.
To maximize profit, a natural monopolist produces the level of output at which
A. Marginal revenue equals marginal cost. B. Price equals average total cost. C. Price equals marginal cost. D. Marginal cost equals average total cost.