The opportunity cost of holding money is measured by the:
a. interest rate
b. liquidity lost by holding money.
c. money supply curve.
d. inflation rate.
e. cost of cashing in financial assets.
Answer: a. interest rate
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Many regulated industries are not pure monopolies
a. True b. False Indicate whether the statement is true or false
________ is an estimation technique that begins with an initial approximation, which is then modified in accordance with additional information.
A. The adaptive rationality standard B. Anchoring and adjustment C. Status quo bias D. Regression to the mean
Institutions:
A) are mostly outside of human control. B) place constraints on human behavior, and these constraints may not be absolute. C) cannot be changed over time. D) do not affect incentives.
If a new seller enters a market to compete with an existing natural monopoly, it will:
A) decrease the costs for both the sellers. B) increase the costs of production for both the sellers. C) increase the production costs for the existing seller, and a decrease in the costs for the new entrant. D) decrease the production costs for the existing seller, and an increase in the costs for the new entrant.