If a natural monopoly is forced to follow a policy of average-cost pricing, the monopolist will:
A. earn economic profits less than zero.
B. charge a higher price than if not regulated.
C. charge the same price as if it were not regulated.
D. increase output to an amount greater than what it would have produced if it were not regulated.
Answer: D
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If the realized real interest rate in an economy is 6%, the nominal interest rate is 8%, and the expected inflation rate is 8%, then the realized inflation rate in the economy is:
A) 2%. B) 4%. C) 8%. D) 6%.
Suppose the Fed buys $1 billion worth of bonds and the required reserve ratio is 10%. In the theoretical limit, the money supply could
A) decrease by $1 billion. B) increase by $1 billion. C) decrease by $10 billion. D) increase by $10 billion.
A restriction on bank activities that was repealed in 1999 was
A) the prohibition of the payment of interest on checking deposits. B) restrictions on credit terms. C) minimum down payments on loans to purchase securities. D) separation of commercial banking from the securities industries.
The longest term security sold by the US is the:
A. Treasury bonds. B. Treasury notes. C. certificate of deposit. D. Treasury bills.