To the extent that the political process of moving legislation through Congress is slow
A. the recognition time lag will be long.
B. automatic stabilizers will not be effective.
C. the action time lag will be long.
D. the effect time lag will be long.
Answer: C
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Suppose a Chinese restaurant provides free tea to its customers. In the economic way of thinking, the restaurant is
A) engaging in predatory pricing of its meals. B) engaging in predatory pricing of tea. C) selling Chinese food below cost. D) doing all of the above. E) almost certainly doing none of the above.
Demand-pull inflation occurs during a period of time in which total spending is increasing less than total output (GDP) is increasing
a. True b. False Indicate whether the statement is true or false
If the quantity of higher education demanded rises by 5 percent when incomes rise by 10 percent,
a. higher education is a normal good b. higher education is an inferior good c. the demand for higher education is price elastic d. the law of demand applies to higher education e. the demand for higher education is price inelastic
The primary explanation for why a regulatory commission may protect the monopoly it is supposed to regulate is that the commission members
a. regularly receive gifts and bribes b. are incompetent c. are experts sympathetic to industry management d. work to increase industry competition e. are directly accountable to the public