One of the tendencies that is common among firms regulated using rate of return regulation is to
A) increase production to an inefficient level.
B) inflate the costs of production.
C) incur an economic loss.
D) understate the costs of production.
E) overstate their total revenue.
B
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If we look at the nominal versus real wage rates paid to Presidents over time, we find that
A) the nominal wage has increased and decreased at different times because of inflation. B) George W. Bush's nominal wage is about equal to the average nominal wage paid all presidents. C) the real wage rate has steadily increased to $400,000 per year. D) George Washington was paid a higher real wage rate than Bill Clinton. E) George W. Bush is the highest paid according to real wage rates.
In Figure 9.8, if full-employment income is produced at $400 billion, which of the following can alleviate a recession?
A. An increase in interest rates. B. An increase in taxes. C. An increase in government spending. D. An increase in saving.