Regulating "natural monopolies" according to the "rate of return" criterion is likely to
a. increase the monopolist's incentive to minimize cost.
b. increase output compared to the situation where the firm is unregulated.
c. completely eliminate the "welfare loss" due to monopoly.
d. do all of the above
B
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Discouraged workers are ________ in the unemployment rate, and this tends to ________ the unemployment rate
A) counted; overstate B) counted; understate C) not counted; overstate D) not counted; understate
The relationship between the unemployment rate and the natural unemployment rate is that the unemployment rate
A) fluctuates about the natural rate. B) equals the natural rate. C) is always below the natural rate. D) is always above the natural rate.
In a simple macroeconomic model, replacing the assumption of exogenous investment with the accelerator theory of investment ________ the effect on equilibrium GDP of fiscal policy changes, and ________ the effect on equilibrium GDP of changes in
autonomous consumption. A) increases, increases B) increases, dampens C) dampens, increases D) dampens, dampens
The natural rate of unemployment worsens if:
a. Labor force mobility worsens. b. Capital markets become more competitive. c. A nation's resource endowments expand. d. Real wages become more flexible. e. None of the above.