Economic incentives are designed to make individual self-interest coincide with social interest. According to economists, which of the following methods of pollution control best uses economic incentives to reduce pollution?
A) imposing quantitative limits on the amount of pollution and imposing a penalty for non-compliance with these limits
B) rewarding environmental groups for monitoring the activities of private firms that produce products which generate pollution
C) requiring the installation of specific pollution control devices
D) instituting a system of tradable emission allowances
D
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To help close an inflationary gap, the government could:
A. run budget deficits. B. decrease taxes. C. increase government spending. D. run budget surpluses.
Excess reserves are
A. Total reserves minus deficient reserves. B. Legal reserves in excess of total reserves. C. Required reserves plus minimal reserves. D. Bank reserves in excess of required reserves.
When a person's income increases:
A. the individual's budget constraint rotates in and becomes steeper. B. the individual's budget constraint shifts straight out, maintaining the same slope. C. the individual's budget constraint rotates out and becomes flatter. D. the individual's budget constraint shifts straight in, maintaining the same slope.
Movements away from equilibrium in the Solow model:
A) persist and cannot be corrected. B) are corrected only through government intervention. C) are automatically corrected. D) are corrected only when the country opens up to international trade.