A natural monopoly usually arises when
A. there are diseconomies of scale in an industry.
B. the government allows unrestricted access to a market.
C. companies band together to form a larger company.
D. there are large economies of scale relative to the industry's demand.
Answer: D
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Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve along the horizontal section, increasing the discount rate
A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
In the federal funds market diagram, an open market sale by the Fed
A) shifts the reserve supply curve to the right. B) shifts the reserve supply curve to the left. C) decreases the federal funds rate. D) increases the volume of federal funds traded.
If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to
A) increase real Gross Domestic Product (GDP). B) increase the price level. C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag. D) decrease both real Gross Domestic Product (GDP) and the price level.
On a one-dollar bill the letter in the middle of the seal indicates the
a. currency printing batch b. year of planned removal from circulation c. district bank issuing the bill d. legal reserve requirement e. type of paper used