A natural monopoly is
A. An industry that is dominated by a single firm.
B. An unregulated monopoly.
C. An industry in which one firm can achieve economies of scale over the entire range of market supply.
D. A monopoly that always benefits society even when it is unregulated.
Answer: C
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Which of the following will most likely generate positive externalities?
a. a hot dog vendor b. public education c. an automobile d. a steel mill
The change in aggregate demand that results from fiscal expansion changing the interest rate is called the
a. multiplier effect. b. crowding-out effect. c. accelerator effect. d. Ricardian equivalence effect.
In the open-economy macroeconomic model, if investment demand increases, then
a. net exports and the real exchange rate rise. b. net exports rise and the real exchange rate falls. c. net exports fall and the real exchange rate rises. d. net exports and the real exchange rate fall.
After the Federal Reserve increases reserves in the banking system, banks create new deposits through multiple rounds of lending and accepting deposits until the:
A. actual reserve-deposit ratio is equal to the desired reserve-deposit ratio. B. actual reserve-deposit ratio is greater than the desired reserve-deposit ratio. C. deposit insurance limit is reached. D. Federal Reserve requires them to stop.