Think of the firms and industries that are familiar to you—how many firms in the industry, what their cost structures may look like—and decide which among them is least likely to be a natural monopoly
a. a professional football franchise in Toledo, Ohio
b. a pharmaceutical firm that produces a life-saving drug after 10 years of research investment
c. a public utilities firm, such as an electric power company
d. a high school in a small rural Kentucky town
e. an alternative rock band
E
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How are aggregate supply and stagflation related?
a. Stagflation usually causes an adverse shift in aggregate supply. b. An adverse supply shift usually causes stagflation. c. Stagflation only follows inflation, with no relation to aggregate supply. d. There is no relationship between the two.
One of the justifications of government stabilization policy is that it may
a. increase the fluctuations in inflation and employment. b. increase the multiplier effect of changes in autonomous spending. c. increase the volatility of economic variables. d. reduce the severity of inflation and unemployment.