The advantages of maintaining monopolies:
A. always outweighs the total welfare costs due to lost surplus.
B. never outweighs the total welfare costs due to lost surplus.
C. sometimes outweighs the total welfare costs due to lost surplus.
D. is a normative argument that has no right answer.
Answer: D
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The Taylor rule says that the ________, the lower the federal funds rate
A) higher the volume of bank reserves B) higher the inflation rate C) lower the output gap D) higher the supply of money
Suppose that initially the price of a bag of jellybeans is $6, and the price of a bottle of cola is $2. If the price of a bottle of cola increases, then the relative price of jellybeans
A) increases. B) decreases. C) stays the same, but the relative price of cola increases. D) stays the same, but the relative price of cola decreases.