Which of the following is a characteristic of capitalism?
A. government ownership of all capital
B. government decision-making is preferred to decentralized decision-making
C. market determination of prices and quantity
D. equality of income
Answer: C
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Briefly describe and discuss the different ways a natural monopoly can be regulated: Marginal cost pricing, average cost pricing, rate of return regulation, and price cap regulation
What will be an ideal response?
In an? economy, the currency drain is 5 percent of deposits and the desired reserve ratio is 2 percent of deposits. If the central bank buys? $100,000 of securities on the open? market, calculate the money multiplier.
Overshooting is when exchange rates:
a. adjust more in the short run than they need to for long-run equilibrium. b. adjust less in the short run than they need to for long-run equilibrium. c. are unable to adjust because of fixed exchange rates. d. adjust at the same rate as prices.
To raise the most tax revenue, governments should tax which of the following goods?
A. SUVs B. gasoline C. designer shoes D. sofas