In 2008, consumers were mailed a stimulus check in response to the recession. The result showed that Ricardian equivalence:
A. held, as most people spent a substantial share of the money.
B. failed to hold, as most people spent a substantial share of the money.
C. held, as most people saved the money.
D. failed to hold, as most people saved the money.
B. failed to hold, as most people spent a substantial share of the money.
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A firm that is a natural monopoly
A) can supply the entire market at a lower average total cost than two or more firms. B) has very small fixed costs and very large marginal costs. C) is infrequently regulated because having one firm serve the market is economically sound. D) cannot make an economic profit if it is not regulated because it must serve a very large customer base. E) produces the efficient quantity of output when it is not regulated.
Leading indicators:
a. Are near perfect predictors of the future. It is for this reason that they are relied on so heavily by governments, central banks, and the private sector. b. Have a mixed track record for predicting business cycles and should therefore be used cautiously. Nevertheless, they still might provide some useful insights. c. Are designed to be used in theoretical research only and therefore do not provide any value added when analyzed for business purposes. d. Give information about an economy's performance in the past and should consequently not be used for business decisions.