Under rate of return regulation, a regulated firm has an incentive to
A) use an efficient amount of capital.
B) set its price equal to its marginal cost.
C) hide losses from bad debts.
D) inflate its costs.
D
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The U.S. federal government embraced all of the Populists' requests, including the nationalization of the railroad system
Indicate whether the statement is true or false
Full employment is defined by the Council of Economic Advisers as
A) 4 percent. B) every adult who wants to work has a job. C) the unemployment rate associated with zero inflation. D) the unemployment rate associated with the normal frictions in the labor market.
Keynesian policy suggests that if inflationary rises in the price level are a concern, the response would be contractionary fiscal policy, using tax increases or government spending cuts to shift AD to the left. What would the result be in this scenario?
a. The result would be downward pressure on the price level, very little reduction in output but a large rise in unemployment. b. The result would be downward pressure on the price level, but very little reduction in output or very little rise in unemployment. c. The result would be downward pressure on the price level, a large reduction in output but very little rise in unemployment. d. The result would be downward pressure on the price level, but a large reduction in output and a large rise in unemployment.
If MUx/Px exceeds MUy/Py, then the consumer should
a. consume more of good X and less of good Y b. consume less of good X and more of good Y c. consume less of both goods X and Y d. not change the consumption levels of X and Y e. consume more of good Z