According to the monetarists, deliberate government intervention:
a. will stabilize the economy if the money supply is increased during recessions and decreased during expansions.
b. will effectively reduce the unemployment rate below its natural rate.
c. will stabilize the economy if the money supply is reduced during recessions and increased during expansions.
d. will destabilize the economy only if the government uses fiscal policy to change equilibrium income.
e. will destabilize the economy and cause a business cycle of its own, regardless of whether fiscal or monetary policy is used.
e
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Compared to the profit-maximizing equilibrium of a natural monopoly, a price cap regulation ________ the firm's price and ________ the firm's output
A) raises; decreases B) lowers; increases C) raises; increases D) lowers; decreases
To avoid an increase in the local property tax, Sullivan County, New York, proposed a 2 percent hotel tax, which presumably would be passed on to tourists. The hotel industry argued that the tax would hurt hotel business. They are really arguing that
a. tourist and convention demand is inelastic, so hotel bookings will decline. b. tourist and convention demand is very elastic, so hotel bookings will decline. c. they would prefer a property tax increase instead. d. it is unfair to tax people who do not live in the area.
As a consumer moves down one of her indifference curves, her satisfaction:
a. falls. b. rises. c. remains unchanged. d. first falls, then levels out.
A business owned and managed by a single individual:
a. cooperative b. corporation c. trade association d. partnership d. sole proprietorship