By imposing tolls on the drivers that drive during the busiest times, a government would be attempting to:
A. internalize an externality.
B. institute a progressive tax.
C. externalize an internality.
D. encourage driving to generate revenue.
Answer: A
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When the overall price level in an economy increases, the interest rate in that economy tends to increase as well. This increase in the interest rate makes investing in domestic assets look more attractive than investing in assets in other countries, so the demand for foreign assets decreases. This is called the _____
a. interest rate effect b. exchange rate effect c. wealth effect d. accelerator effect
How would you characterize the foreign exchange market?
a. Extremely competitive. b. Somewhat competitive. c. Monopolistic. d. Driven by demand by tourists and individuals. e. Involving usually physical exchange one currency for another.
Targeted asset purchases are:
A. statements today about policy targets in the future. B. asset purchases that increase the reserves held by the federal government. C. expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target. D. asset purchases that shift the composition of the Fed's balance sheet.
Which of the following statements is not true?
A) Consumer surplus measures the difference between the highest price a consumer is willing to pay for a product and the price she actually pays. B) Marginal benefit is the additional benefit to a consumer from consuming one more unit of a product. C) Consumer surplus measures the net benefit from participating in a market. D) Producer surplus measures the total benefit received by producers from participating in a market.