Which of the following is not true?
A. A monopolist typically seeks to maximize profits.
B. Economies of scale are the cause of natural monopolies.
C. A monopolist can set price at arbitrarily high levels.
D. Monopolists price on the elastic portion of their demand curves.
Answer: C
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Which of the following describes the degree of control that the Fed has over the money supply?
A) The Fed has substantial control over the money supply. B) The Fed has absolute control over the money supply. C) The Fed has no control of the money supply. D) The Fed is not concerned about the level of the money supply, and does not attempt to control it.
Three policy lags limit the effectiveness of monetary policy: recognition lags, implementation lags, and impact lags. Of these three policy lags, fiscal policy is impacted by
A) only implementation and impact lags. B) only recognition and implementation lags. C) only recognition and impact lags. D) all three policy lags.