A natural monopoly
A) requires government licensing initially.
B) is derived from deposits of natural resources.
C) usually arises when there are large economies of scale.
D) involves multiple firms selling differentiated products.
Answer: C
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Expansionary monetary policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be relatively ________ and real GDP to be relatively ________
A) lower; higher B) higher; higher C) lower; lower D) higher; lower
From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly faster than long-run aggregate supply, then the Federal Reserve would most likely
A) increase income tax rates. B) decrease income tax rates. C) increase interest rates. D) decrease interest rates.