What is one problem with trying to regulate a monopoly's price?
A) The government needs information on the monopoly's marginal cost.
B) The government needs information on the price people are willing to pay.
C) The government needs to identify which firm is a monopolist.
D) Anything that the government does is problematic.
A
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The table below shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.RGDPConsumption$600$590610598620606630614640622650630660638If investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10 and lump-sum taxes also increased from $0 to $10, other things constant, the equilibrium real GDP would become
A. $630. B. $650. C. $660. D. $640.
The rate a bank pays for deposit insurance should be independent of the investments undertaken by the bank with depositors' funds
Indicate whether the statement is true or false
If government spending increases, which of the following would be most likely in the short and in the long run? (Both comparisons are with regard to the original price level/output combination.)
a. Short-run increases in the price level, no change in output; long-run increases in output and in the price level b. Short-run increases in output and in the price level; long-run increase in output, decrease in the price level c. Short-run decreases in output and in the price level; long-run increase in the price level, no change in output d. Short-run increases in output and in the price level; long-run increase in the price level, no change in output e. Short-run decreases in output and in the price level; long-run decreases in output and in the price level
According to the assignment rule, which of the following policy mixes is appropriate for a country with high inflation, a balance of payments deficit, and fixed exchange rates?
A. Contractionary fiscal policy and contractionary monetary policy B. Expansionary fiscal policy and contractionary monetary policy C. Contractionary fiscal policy and expansionary monetary policy D. Expansionary fiscal policy and expansionary monetary policy