If a country with a large government debt uses money creation to service and repay the debt, this will lead to
a. lower interest rates.
b. an appreciation of the nation's currency in the foreign exchange market.
c. inflation, higher interest rates, and a financial crisis.
d. rapid economic growth, as the expansionary monetary policy stimulates the economy and generates the additional tax revenue to service the larger debt.
C
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What would be a way for the Federal Reserve to stimulate a sluggish economy?
A) buy government bonds on the open market B) encourage the stock market C) print more money D) sell more government bonds
For a natural monopoly, economies of scale
A) exist along the long-run average cost curve at least until it crosses the market demand curve. B) and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. C) lead to a legal barrier to entry. D) as well as constant returns to scale and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. E) are totally absent.
In the above figure, if the market is in equilibrium, area A + area B + area C equals
A) total surplus. B) consumer surplus. C) deadweight loss. D) producer surplus. E) total revenue.
The model of perfect competition can be fruitfully used to analyze markets that don't perfectly fit the description of this market type
a. True. b. False.