When demand is inelastic, a decrease in price will result in a decrease in total revenue.
Answer the following statement true (T) or false (F)
True
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What is regulatory capture?
A) It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest. B) It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest. C) It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign. D) It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
Part of the spending on the Doyle Drive project in northern California came from the American Reinvestment and Recovery Act, which is an example of ________ aimed at increasing real GDP and employment
A) an automatic stabilizer B) a transfer payment C) discretionary fiscal policy D) contractionary fiscal policy
An international lender of last resort creates a serious moral hazard problem because ________ and other ________ of banking institutions expect that they will be protected if a crisis occurs
A) depositors; debtors B) depositors; creditors C) borrowers; debtors D) borrowers; creditors
Which of the following could trigger supply-side inflation?
A. A decrease in the wage rate for all workers B. An increase in raw materials’ prices C. An increase in the productivity of capital D. An increase in the labor force