If a public utility is subject to average-cost pricing regulation, it will:
a. earn a normal rate of return
b. produce the socially efficient level of output.
c. suffer economic losses without a subsidy.
d. earn an above-normal rate of return.
a
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All of the following will cause a shift in the supply of jeans EXCEPT
a. a decrease in the prices of jeans. b. a decrease in the number of jean manufacturers. c. an increase in the cost of producing jeans. d. a per-unit government subsidy on the production of jeans.
How rapidly does the economy's self-correcting mechanism work? Most economists agree that it
a. works quickly and reliably. b. works slowly and not very reliably. c. works reliably, but not very quickly. d. does not work at all.
A business cycle is actually a continuous series of different...
What will be an ideal response?
As the tax rate increases, the absolute value of the tax multiplier
A. increases. B. does not change. C. decreases. D. could either increase or decrease depending on the value of the MPC.