Micromania's City Council has been discussing policy options regarding the local taxi company. Citizens have complained that it is a natural monopoly and that its fees are inappropriate. Which of the following would allow the company to stay in business while guaranteeing a "reasonable" taxi price for citizens?

Volatility clustering

A) is evident in most cross-sections. B) implies that a series is serially correlated. C) can mostly be found in studies of the labor market. D) is evident in many financial time series.

In 2007-2009, the Fed cut interest rates to limit the international financial crisis. What is the effect of this on velocity?

a. It will decrease. b. It will increase. c. It will remain constant. d. Velocity is unrelated to interest rates.