Use the following information to answer the question below. It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. Based on the preceding information, which of the following policies would be most appropriate for dealing with this problem?
A. Levy a tax on the producers of electricity and use the tax revenues to clean up the river.
B. Levy a tax on the consumers of paper products and use the tax revenues to conduct research on new energy sources.
C. Levy a tax on the consumers of electricity and use the tax revenues to subsidize the consumers of paper products.
D. Levy a tax on the producers of paper products and use the tax revenues to clean up the river.
Answer: D
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If the current account is in deficit, imports of goods and services exceed exports of goods and services (plus net unilateral transfers)
a. True b. False
In the above figure, the economy is initially at point B. If the Fed increases the quantity of money, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.