According to the open-economy macroeconomic model, if the United States moved from a government budget deficit to a government budget surplus, U.S. real interest rates would increase and the real exchange rate of the U.S. dollar would appreciate
a. True
b. False
Indicate whether the statement is true or false
False
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Answer the following statement(s) true (T) or false (F)
1. A Pigouvian tax is a charge on a good whose production generates a negative externality, such that the charge isequal to the MEC at the competitive output level.
2. In the single-polluter case, a firm faced with an emission charge for pollution implemented as a marginal tax (MT) will abate as long as MAC
If the magnitude of the external costs in an industry increased
a. The supply curve including external costs would increase b. The efficient price would increase c. The market price would increase d. Both a and b are true
List the reasons why the actual multiplier, which is estimated to be less than 2 for the U.S. economy, is much less than what the oversimplified formula suggests
If supply increases, then:
A. the quantity demanded will increase. B. price will increase. C. demand will increase. D. the quantity demanded will decrease.