Firms buy and sell the right to pollute:
a. under a system of compliance standards
b. under a free market system where there is no government intervention and property rights are not well-defined.
c. under a system of transferable pollution permits.
d. under a pollution tax system.
c
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The purchase of a foreign asset by a U.S. resident is a
A) surplus item on the financial account. B) deficit item on the current account. C) deficit item on the financial account. D) surplus item on the current account.
Looking at the supply-side effects on aggregate supply shows that a tax hike on labor income
A) decreases potential GDP. B) weakens the incentive to work. C) increases potential GDP because people work more to pay the higher taxes. D) Both answers A and B are correct. E) None of the above is correct.
Long-run macroeconomic equilibrium occurs when
A) aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run aggregate supply curve. B) structural and frictional unemployment equals zero. C) aggregate demand equals short-run aggregate supply. D) output is above potential GDP.
Answer the following statements true (T) or false (F)
1. Forms of imperfect competition include monopoly, oligopoly, and monopolistic competition. 2. Oligopsony refers to a market in which there are a few buyers. 3. Monopsonistic competition is a market in which there are only a few sellers but each offers different conditions to sellers. 4. The rule of reason applies to antitrust activity. 5. The Clayton Act brought labor unions under the jurisdiction of the antitrust laws.