Which of the following is a problem with government regulation of natural monopolies?
a. creation of excessive profits levels
b. reduced incentives to cut costs
c. decreased number of firms in the market
d. lack of influence from special interest groups
b
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Along a straight-line supply curve:
A. the change in elasticity depends on the supply curve in question. B. elasticity is equal to slope. C. elasticity declines as price declines. D. elasticity rises as price rises.
A time-inconsistent monetary policy is one that:
a. is set by congressional decree. b. is based on monetary targets established by law. c. changes over time as economic conditions change. d. follows a zero percent inflation rate. e. does not adapt to changing economic conditions.
In a free-market system, producers will react to an increase in demand when
a. the price goes up. b. the government announces the increased demand. c. their costs increase. d. the free press publishes news of the increased demand.
Kristine has a savings account at a bank. If the nominal interest rate she earns exceeds the rate of inflation, then her purchasing power increases over time
a. True b. False Indicate whether the statement is true or false