Setting a proper price is difficult in a nationalized industry because
a. costs will not be restricted by competitive pressures
b. the government will have difficulty purchasing resources
c. the government will have difficulty estimating demand for the product
d. there is a consumer bias against government-supplied products
e. government will not have access to relevant information
A
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If the Fed allows the federal funds rate to fall well below the rediscount rate it is likely that the Fed will
A) lower the rediscount rate and increase c, the proportion of demand deposits held as cash. B) raise the rediscount rate. C) increase loans to banks. D) decrease loans to banks.
An important distinction between Friedman's and others' views of the demand for money is the former's emphasis on the
A) substitution between money and virtually all other goods and assets. B) nominal rate of interest. C) substitution between money and other financial assets. D) effects of wealth.