Which of the following types of economic regulation is most likely to encourage a natural monopoly to NOT inflate its costs?
A) average cost pricing rule
B) rate of return regulation
C) price cap regulation
D) None of the above encourages cost cutting.
C
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What are some criticisms of the CPI as a measure of inflation?
Which of the following is a way in which a government could encourage spending on research and development?
a. Increase the tax rate on capital gains b. Enhance patent protection c. Decrease funding to universities d. Increase the tax on corporate profits e. Increase the budget deficit
A recent decline in interest rates made home construction more affordable for many families. The consequent increase in construction produced a rightward shift in the demand curves for construction materials. Economists would say that the change in demand for materials is due to
a. the principle of marginal productivity. b. rent seeking. c. diminishing marginal returns. d. derived demand.
In the late 1970s and early 1980s, the velocity of money increased significantly. The main reason(s) for the increase was:
A. the introduction of stock and bond mutual funds with draft writing privileges and low nominal interest rates. B. high nominal interest rates. C. the introduction of stock and bond mutual funds with draft writing privileges along with high nominal interest rates. D. as presidential election years near the velocity of money increases.