When the Federal Reserve wants to slow inflation, it
A) lowers the federal funds rate.
B) increases taxes on interest income.
C) raises the federal funds rate target.
D) increases aggregate income, output, and employment.
E) cuts the federal funds rate target aggressively to almost zero.
C
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When regulated using rate of return regulation, who benefits from the practice of some natural monopolies to count sumptuous offices, free baseball tickets, golf excursions, and limousines as costs of production?
A) stockholders B) managers of the monopoly C) customers of the monopoly D) regulators of the industry E) None of the above answers is correct.
A Rolling Stones song goes: "You can't always get what you want." This echoes an important theme from microeconomics. Which of the following statements is the best example of this theme?
A) Consumers must make the best purchasing decisions they can, given their limited incomes. B) Workers do not have as much leisure as they would like, given their wages and working conditions. C) Workers in planned economies, such as North Korea, do not have much choice over jobs. D) Firms in market economies have limited financial resources.