The rate-of-return regulated public utility can have incentive to price some services too high and others too low, relative to efficient prices
Indicate whether the statement is true or false
T As in its tendency to favor capital over other inputs, the rate-of-return regulated public prefers to sell services that require more capital. So it may set the price of a peak-load service low in order to create more demand for capital, and price off-peak service high to make profit that the capital can be used to justify.
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Which of the following would cause investment spending to decrease and aggregate demand to shift left?
a. a decrease in the money supply and an investment tax credit. b. the repeal of an investment tax credit and an increase in the money supply. c. a decrease in the money supply and the repeal of an investment tax credit. d. an investment tax credit and an increase in the money supply.
Public saving is positive when:
A. the government's budget is balanced. B. there is a government budget surplus. C. after-tax income of households and businesses is less than consumption expenditures. D. after-tax income of households and businesses is greater than consumption expenditures.