A natural monopoly regulated with an average cost pricing rule is ________
A) efficient and incurs an economic loss
B) inefficient and makes zero economic profit
C) inefficient and makes an economic profit
D) efficient and makes zero economic profit
B
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How does an increase in autonomous expenditure change real GDP in the short run? Does real GDP change by the same amount as the change in aggregate demand? Why or why not?
What will be an ideal response?
What would be the effect of a decrease in the real interest rate and an increase in the expected inflation rate?
a. Both changes would decrease aggregate demand. b. Both changes would increase aggregate demand. c. Both changes would increase short-run aggregate supply. d. Both changes would increase long-run aggregate supply.
Grace consumes two goods: iced tea and spaghetti. The price of iced tea is $2 per bottle. Her income is $500 per month. Grace spends all her income each month. She purchases 50 bottles of iced tea and 100 servings of spaghetti. What is the price of a serving of spaghetti?
a. $10 b. $5 c. $4 d. $2
If the interest rate is 8 percent, then what is the present value of $5,000 to be received in ten years?