In the diagram above, what will happen if the government sets the minimum wage at Point A? There will be a surplus of workers .
What should Lilliputs government do to improve the economy?
What should Lilliput's government do to improve the economy? Lower the income tax, which gives citizens more money to spend , and buy more services from civilian-owned businesses, which creates more jobs. ... Explain how the Federal Reserve may use the discount rate and the reserve requirement to increase the money supply.
Why do governments regulate natural monopolies Module 4?
Why do governments regulate natural monopolies? Some products are produced most efficiently when there is a single supplier. ... The government increases taxes .
Why is it important for natural monopolies to exist?
Why is it important for natural monopolies to exist? They help the consumer decide among several suppliers for a necessary service . They improve the economy by using materials that are native to the area. They make it more efficient to deliver necessary goods and services to consumers.
Which of the following is a function of the Federal Reserve System Board of Governors quizlet?
What is the role of the Board of Governors? Main governing body of the Federal Reserve System whom analyzes economic data, supervise Reserve Banks, creates and oversees financial regulations , participates in the Federal Open Market Committee, and communicates with leaders in other parts of the government.
How does the US government promote economic growth?
The U.S. government uses both fiscal and monetary policy to protect our economy and promote long-term economic growth. The protections that fiscal policy provides are help in a recession, keeping inflation in check, and preventing boom and bust periods in the economy.
What will happen if the government sets the price for potatoes at point A?
At that price, quantity demanded exceeds quantity supplied. ... in the diagram above, what will happen if the government sets the price for potatoes at point A? There will be a surplus of potato . Look at the graph.
How does the government take an active role in controlling the economy?
The U.S. government influences economic growth and stability through the use of fiscal policy (manipulating tax rates and spending programs) and monetary policy (manipulating the amount of money in circulation). ... When the government raises taxes, money moves out of private hands and into government coffers.
Why do governments regulate monopolies?
Competitive firms sell at market prices, which maximizes both consumer surplus and total surplus. Hence, governments regulate monopolies with the objective of benefiting societies more than would be the case if the monopolies maximized their profits . ...
Why is it in the best interest of the government to regulate natural monopolies?
Why is it the best interest of the government to regulate natural monopolies? To allow multiple suppliers access to the market. To gain a share of the profits of the monopoly. To keep costs to a minimum for consumers .
When an industry is a natural monopoly What can we expect?
Definition: A natural monopoly occurs when the most efficient number of firms in the industry is one . A natural monopoly will typically have very high fixed costs meaning that it is impractical to have more than one firm producing the good.
Why are monopolies banned in the US?
Competitors may be at a legitimate disadvantage if their product or service is inferior to the monopolist's. But monopolies are illegal if they are established or maintained through improper conduct , such as exclusionary or predatory acts.
What are the four most important ways a firm becomes a monopoly the four main reasons a firm becomes a monopoly are?
The four main reasons a firm becomes a monopoly are: the government blocks entry, control of a key resource, network externalities, and economies of scale .
What are the three main responsibilities of the Federal Reserve?
The Fed's main duties include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services .
What are the 5 functions of the Federal Reserve?
The Federal Reserve performs five general functions— conducting the nation's monetary policy, regulating banking institutions, monitoring and protecting the credit rights of consumers , maintaining the stability of the financial system, and providing financial services to the U.S. government.
Which is the most important function of the Federal Reserve System?
The Federal Reserve System is the central banking system of the United States. Its major purpose is to control the supply of money in the economy . In addition, the Fed is the fiscal agent of the U.S. Treasury, it clears checks in the economy and is responsible for general regulation of the banking system.
