Direct controls are generally much more costly than emissions taxes because
A. under direct controls emissions cutbacks are usually not apportioned among the firms on the basis of their ability to reduce pollution cheaply and efficiently.
B. emissions tax per unit of output is higher than the per-unit direct control program cost.
C. government cannot legally levy emissions taxes that are as high.
D. firms disregard emissions taxes.
Answer: A
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In economic terms, tariffs are preferred to quotas because
A) domestic manufacturers gain more producer surplus. B) there is less loss of consumer surplus. C) tariffs are easier to administer. D) quotas create a greater production inefficiency. E) given the way quotas are usually administered, tariffs cause a smaller net national welfare loss.
When yield curves are downward sloping
A) long-term interest rates are above short-term interest rates. B) short-term interest rates are above long-term interest rates. C) short-term interest rates are about the same as long-term interest rates. D) medium-term interest rates are above both short-term and long-term interest rates.
Answer the following statements true (T) or false (F)
1. As the economy expands, it requires less and less investment. 2. Keynes described a horizontal short-run aggregate supply curve when output can be increased by using unemployed resources. 3. As income increases, the absolute level of planned consumption will increase. 4. Keynes recommended the use of government deficit spending to overcome widespread unemployment. 5. A composite aggregate supply curve is horizontal at low levels of output, then upward sloping for higher levels of output until output reaches capacity and the AS curve becomes vertical.
Other things remaining the same, a decrease in inflationary expectations causes the velocity of money to:
a. Rise. b. Fall. c. Not change.