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As there are natural monopoly market situations it is in the public interestto permit monopolies, but traditionally in the United States they are regulated with respect to price. The purpose of the rate regulation was to make sure that the public would not suffer price gouging as a result of the monopoly position of the firms. Some examples of regulated natural monopolies are electric utilities, cable TV companies, and telephone companies (local).
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The economy, however, is facing inflationary pressures. To deal with the macroeconomic problem, the government uses expansionary fiscal policy to decrease taxes and, as an indirect
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