The rate-of-return regulated public utility can have incentive to use more capital than is efficient relative to other inputs
Indicate whether the statement is true or false
T The rate-of-return regulated public utility earns profit based on how much capital it uses, and if the return it is allowed to earn per unit of capital exceeds its cost of capital, which is usually the case, it will want to use more capital so it can keep more profit.
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Which of the following is NOT a disadvantage of exchange-rate targeting?
A) It relies on a stable money-inflation relationship. B) The targeting country gives up an independent monetary policy. C) The targeting country is left open for a speculative attack. D) It can weaken the accountability of policymakers.
If nominal gross domestic product is $4,800 and the money supply is $600, the velocity of money is _____
a. 18.3 b. 8 c. 4.57 d. 12
Exhibit 9-6 Two-Firm Payoff Matrix
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Assume costs are identical for the two firms in Exhibit 9-6. If both firms were allowed to form a cartel and agree on their prices, equilibrium would be established by:
A. Widget Co. charging the low price and Ajax Co. charging the high price. B. Widget Co. charging the high price and Ajax Co. charging the low price. C. Widget Co. charging the low price and Ajax Co. charging the low price. D. Widget Co. charging the high price and Ajax Co. charging the high price.
In the traditional Keynesian model, if the government raises taxes, then
A. both consumption and real Gross Domestic Product (GDP) will increase. B. both consumption and real Gross Domestic Product (GDP) will decrease. C. consumption will increase but Gross Domestic Product (GDP) will decrease. D. consumption will decrease but Gross Domestic Product (GDP) will increase.