Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? The government could
a. regulate the monopoly.
b. prohibited the monopoly from price discriminating.
c. force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost.
d. None of the above would eliminate any inefficiency associated with a monopoly.
a
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If the Fed were to set policy according to the Taylor rule, then if real GDP falls by 2 percent below potential GDP, the Fed should:
A. raise the real federal funds rate by 1 percentage point. B. reduce the real federal funds rate by 1 percentage point. C. raise the inflation rate by 1 percentage point. D. change the real federal funds rate until inflation hits the target rate of 4 percent.
The demand curve shows the relationship between:
A. money income and quantity demanded. B. consumer tastes and the quantity demanded. C. price and production costs. D. price and quantity demanded.