What important function does adjudication perform in the process of reducing negative externalities?
A) It allocates the revenue from negative externalities to the people who have been damaged.
B) It arbitrates between beneficiaries of negative externalities and the people who must bear their costs.
C) It decides whether punitive or merely compensatory damages will be awarded.
D) It discovers who has which rights.
E) It imposes criminal penalties on the people responsible for generating negative externalities.
D
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Requiring a firm with international operations to follow the standards of its home country instead of those of the foreign country has all of the following advantages EXCEPT
A) it takes care of the fear of a race-to-the-bottom by making it impossible for a home-based company to exploit low standards. B) it shifts the costs of improved standards to firms and consumers in high-income countries. C) it removes the threat of domestic firms relocating abroad for low standards and ensures that any relocation that takes place is due to foreign comparative advantage. D) it avoids the problems of high-income countries dictating what standards are to be used. In this situation, firms that cross national boundaries must conform to whichever standards are higher. E) it is a comprehensive measure, since it addresses the problem of production in foreign firms as well as firms from high-standards countries that relocate abroad.
Suppose the Fed cares only about keeping the economy close to full-employment output
The Fed can target the real money supply (thus keeping the LM curve fixed) or it can target the real interest rate, changing the money supply and shifting the LM curve however is necessary to prevent a change in the real interest rate. (a) Which is the best policy if the main shocks to the economy are shocks to the IS curve? Explain why. Illustrate with a diagram. (b) Which is the best policy if the main shocks to the economy are shocks to real money demand? Explain why. Illustrate with a diagram.
If a series of severe storms in the Atlantic Ocean drastically significantly disrupted the transatlantic slave trade, which would most accurately describe the market for slaves in colonial America?
a. The price of slaves would increase and the quantity of slaves would decrease. b. The price and quantity of slaves would increase. c. The price and quantity of slaves would decrease. d. The price of slaves would decrease and the quantity of slaves would increase.
Which of the following is false?
a. Expansionary fiscal policy will tend to cause net exports to fall b. The larger the crowding out effect, the smaller the actual effect of a given change in fiscal policy. c. The crowding out effect does not occur with a tax change. d. Starting from an initial recession equilibrium, expansionary fiscal policy could potentially increase employment to the full employment level.