The potential problem with competitive pricing regulation of a natural monopoly is that ________.
A. P < MR
B. P < ATC
C. P < AVC
D. P < MC
Answer: B
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In the equation Y = (1/1 – b + v)(a + I + G + X ? u), the term (1/1 – b + v) is referred to as the
a. level of autonomous expenditures. b. autonomous expenditure multiplier. c. balanced budget multiplier. d. tax multiplier.
Why does the Fed have imperfect control over the money supply?
a. Because the Fed does not know how much reserves will change when it buys or sells securities. b. Because of unpredictable changes in the public's desire to hold cash and banks' desires to hold reserves. c. Because of unpredictable changes in reserve requirements. d. Because of the secrecy of FOMC meetings, which lead to policy surprises.
An outcome is socially optimal if it:
A. maximizes total economic surplus. B. leaves no unexploited opportunities for individuals. C. is an equilibrium outcome. D. it is determined by the government.
What is money?
What will be an ideal response?