Under rate-of-return regulation, average cost pricing
A. is inflated so the firm can make economic profits.
B. includes what they consider to be a fair rate of return on investment.
C. includes a cost for capital that generates an above normal rate of return.
D. includes variable costs but not a cost for capital.
Answer: B
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The Walt Disney Company uses cost-plus pricing to determine the prices it charges for admission and rides at Disneyland and Walt Disney World
Indicate whether the statement is true or false
Legislated federal government payments that anyone who qualifies can receive are called
A) controllable expenditures. B) a fiscal stabilizer. C) balanced expenditures. D) entitlements.
According to classical economists, the price level will remain unchanged as long as the growth rate of M equals
a. the growth rate of Q b. the growth rate of P c. the growth rate of V d. the inflation rate e. zero
The Fed would use a reverse repo when they:
A. forecast a permanent increase in the demand for monetary base. B. forecast a permanent decrease in the demand for monetary base. C. want to temporarily increase the monetary base. D. want to temporarily decrease the monetary base.