If the government increases spending while holding taxes constant, we expect
A. interest rates to rise.
B. planned real investment spending by businesses to increase.
C. a decrease in real saving as consumers follow suit and also increase borrowing.
D. an increase in investment spending by businesses too, as they anticipate future economic growth.
Answer: A
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When a natural monopoly is? inevitable, the government often sets a maximum price that the monopolist can charge consumers. Under an average ?-cost pricing? policy, the government picks the price at which the market demand curve intersects the? monopolist's long ?-run ?average-cost curve. The firm will earn a normal profit.
When a natural monopoly is? inevitable, the government often sets a
price that the monopolist can charge consumers. Under
pricing? policy, the government picks the price at which the
curve intersects the? monopolist's
?average-cost curve. The firm will earn
profit.
Use the figure below to answer the next question. 
An increase in the economy's human capital would
A. shift the production possibilities frontier from CD to AB. B. move the economy away from point B and toward point A. C. shift the production possibilities frontier from AB to CD. D. move the economy away from point A and toward point B.
The countries that contribute the most to worldwide greenhouse gas emissions
A. are all developed countries. B. are all developing countries. C. include a mix of developed and developing countries. D. cannot be identified since greenhouse gases move throughout the atmosphere.
Refer to Table 7.1. Output is increasing at
A) a diminishing rate. B) an increasing rate. C) a constant rate. D) a negative rate.