"The theory that regulation seeks an efficient use of resources is called the capture theory of regulation." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?
The statement is incorrect. The capture theory is the theory that the regulated producers "capture" the regulators and so the regulators help the producers maximize their economic profit. The theory that regulation seeks an efficient use of resources is the "social interest" theory.
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Why is bundling of unrelated products, one of which is available in the competitive market, a losing strategy?
Answer the following statements true (T) or false (F)
1. The hoped-for effect of the tax rebate of 2008 was an increase in aggregate supply. 2. The tax rebate approach is, by itself, an example of pump priming. 3. A deflation is a slowdown in the rate of inflation. 4. Cost-push inflation originates on the supply side of the economy. 5. Stagflation suggests a rate of inflation near zero. 6. If the expected inflation rate declines, the short-run Phillips curve shifts downward. 7. Deflation and disinflation are synonymous terms. 8. Debtors tend to benefit more from inflation than creditors do. 9. Crowding out occurs when unemployment compensation increases and income taxes are held constant.
Recently, Dow Chemical 8.5 percent bonds maturing in 2006 closed at $92 with a face value of 100 . This means the Dow bonds
a. sold for $92 each. b. increased in value $92 that day. c. sold at 92 percent of par value. d. had the year of maturity changed to 1992.
if you take investment by US residents in other countries and you subtract investment by foreign resident in the US, you will find
What will be an ideal response?