Physical and human capital investments are
a. different in that the opportunity for economic profit is present for physical capital but not human capital decisions.
b. different in that human capital decisions do not involve future income considerations while physical capital investments do.
c. similar in that non-pecuniary considerations do not influence the choices of utility-maximizing decision makers in either case.
d. similar in that both involve forgoing current income (and consumption) with the objective of increasing one's future income (and consumption).
D
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If a country wants to keep the domestic currency overvalued against a foreign currency:
A) it will buy both the foreign and domestic currency. B) it will sell both the foreign and domestic currency. C) it will buy the domestic currency and sell the foreign currency. D) it will buy the foreign currency and sell the domestic currency.
The Coase Theorem states that:
A. if bargaining is difficult, then regardless of how property rights are assigned, voluntary agreements between parties will remedy the market failures associated with externalities and restore economic efficiency. B. if bargaining is frictionless, then the initial assignment of property rights determines the market failures associated by externalities and voluntary agreements between private parties are useless. C. if bargaining is frictionless, then regardless of how property rights are assigned, voluntary agreements between private parties will remedy the market failures associated with externalities and restore economic efficiency. D. if bargaining is frictionless, market failures must be remedied by government intervention.
Unlike World War I (1914–18), the war debt of World War II (1941–45) was manageable and did not contribute to inflation
Indicate whether the statement is true or false
Pollution abatement is likely to be most costly under: a. a compliance standard
b. a per-unit pollution tax system. c. a system of transferable pollution rights. d. Costs are the same under all three pollution control policies.