(Last Word) A cap-and-trade program:
A. assigns a property right to the atmosphere.
B. mandates that every firm individually cut its emissions to below a certain level.
C. assigns a property right to polluting the atmosphere.
D. is easy to establish and enforce.
Answer: C
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A reentrant is an individual
A) in the labor force whose employment was involuntarily terminated. B) who used to work full time but left the labor force and has now reentered it looking for a job. C) in the labor force who quits voluntarily. D) who has never held a full-time job lasting two weeks or longer but is now seeking employment.
Appendix: An incentive-compatible mechanism for revealing true willingness to pay in a private value auction is
a. impossible b. a Dutch auction c. a second-highest sealed bid auction d. a sequential auction with open bidding e. a discriminatory price all-or-nothing auction.
The wealth effect:
A. is not present when wages keep pace with inflation. B. is the positive relationship between consumer spending and the overall price level. C. explains the downward-sloping aggregate demand curve. D. explains how the aggregate demand curve shifts.
Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:
A. if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable. B. that changes in the money stock do not affect output or prices. C. the Fed will miss its money supply targets and make the economy worse. D. monetary policy can stimulate aggregate demand, but it cannot affect inflation.