When a paper producer pollutes the air, economists argue that there is
A) efficiency, if production is at its maximum level.
B) a positive externality.
C) an external cost.
D) a cost paid solely by the firm.
Answer: C
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The current exchange rate system for most currencies is described most accurately as one of
A. fixed exchange rates. B. freely flexible exchange rates. C. gold standard rates. D. dirty or managed floating.
The real seignorage collected by the government in an all-currency economy is the product of
A) the rate of inflation and the real supply of government bonds. B) the rate of inflation and the real money supply. C) the debt—GDP ratio and the real money supply. D) the debt—GDP ratio and the rate of inflation.
The ________ measure of money contains items that are not direct media of exchange, such as ________
A) M1, checkable deposits B) M1, savings certificates C) M2, checkable deposits D) M2, savings certificates
Suppose U.S.-produced wheat costs $5 per bushel and the exchange rate is 100 yen = $1 . If the exchange rate changes to 90 yen = $1, the
a. wheat would now cost more dollars. b. wheat would now cost the Japanese citizen less yen. c. wheat would now cost less dollars. d. wheat would now cost the Japanese citizen more yen. e. yen has depreciated in value.