In a natural monopoly, throughout the range of market demand,
a. marginal cost exceeds average cost and therefore pulls average cost upward
b. average cost exceeds marginal cost and therefore pulls marginal cost upward
c. marginal cost is below average cost and therefore pulls average cost downward
d. average cost is equal to marginal cost
e. there are diseconomies of scale
C
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Fear of floating is:
A) when the benefits of floating exchange rates outweigh the costs. B) when the attractions of fixed exchange rates are large relative to those of floating. C) when countries adopt the gold standard. D) when countries say they are floating, but fix their exchange rates in practice.
Suppose the central bank of a country increases the discount rate from 5 percent to 7 percent. The demand for money remaining unchanged, this is likely to _____ in the country
a. increase the money supply b. decrease interest rates c. leave the interest rates unchanged d. increase interest rates