Because a monopolist has no incentive to control costs under a policy of average-cost pricing, we can expect:
A. price to increase over time as costs rise.
B. price to fall over time as costs rise.
C. profits to increase over time as costs rise.
D. profits to decrease over time as costs rise.
Answer: A
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Which of the following is NOT included in the M1 money supply?
A) currency B) passbook savings accounts C) traveler's checks D) checkable and debitable accounts
The "shoe-leather costs" of inflation are the costs from
A) the government taking a higher percentage of interest income. B) higher prices for all goods, including necessities such as shoes. C) confusion as people lose track of real costs and benefits. D) higher taxes due to higher inflation. E) time spent trying to spend money quickly.
Positive analysis of economic policy
A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. C) generates less agreement among economists than normative analysis. D) is rare in questions of economic policy.
Just after a cyclical trough, given the excess capacity in the economy, there should be an unusually ________ rate of closing the gap between desired and actual capital stocks, making net investment respond relatively ________ to rising sales
A) high, strongly B) high, weakly C) low, strongly D) low, weakly