Supply-side economists emphasize the importance of saving to finance investment.
Answer the following statement true (T) or false (F)
True
Policies such as lower capital gains taxes allow more savings to flow to investment projects, resulting in a rightward shift of AS.
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When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the two inflation rates
A) move in opposite directions. B) remained constant over the forty year period after 1979. C) steadily increased over the forty year period after 1979. D) move up and down in similar but not identical ways. E) both fluctuate, but the fluctuations have little relationship to each other.
For a natural monopoly, if price is equal to marginal social cost, then
A) the deadweight loss is as large as possible. B) the firm makes zero economic profit. C) there is no deadweight loss. D) there is no deadweight loss and the firm makes a positive economic profit.