Monopolies that exist because economies of scale create a barrier to entry are called:
A. government monopolies.
B. natural monopolies.
C. normal monopolies.
D. price-discriminating monopolies.
Answer: B
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Which of the following correctly describes a way in which deficit spending can impose a burden on future generations?
I. Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt. II. Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits. III. Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed. A) I only B) II only C) I and III only D) II and III only
Proponents of the real business cycle model argue that the short-run aggregate supply curve is
A) flat. B) negatively sloped. C) positively sloped. D) vertical.
To derive the labor market demand curve, the labor demand curves for each firm in the output market of interest are summed
Indicate whether the statement is true or false
The real value of any variable is its nominal value:
A. adjusted for inflation. B. holding the base constant. C. adjusting for income. D. holding the basket constant.