A pollution tax:
A. is a method used to internalize external costs.
B. will not affect the price of the good being produced.
C. does not affect the quantity of a good demanded.
D. is a method used to externalize internal costs.
Answer: A
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Refer to the scenario above. Which of the following will happen if Mike decides to mow his lawn by himself?
A) GDP will remain unchanged. B) Per capita income will increase. C) GDP will decrease. D) GDP will increase.
In the late 1600s, the stock being traded in London's Exchange Alley that created a financial bubble belonged to the:
A. South Seas Company. B. East India Company. C. Bubble Company. D. Mediterranean Company.
If the domestic income of a nation’s citizens increase thus causing consumption spending to increase, then we generally expect net export spending to:
A. increase as well because as consumption increases we also buy more foreign goods and services. B. decrease as well because as consumption increases we also buy more foreign goods and services. C. remain constant because when we increase domestic purchases it is directly offset by a reduction in foreign purchases. D. there is not enough information to determine what would happen.
Describe two basic differences between the mainstream and monetarist economic theories.
What will be an ideal response?