In the case of a negative externality, the social marginal cost will
a. exceed the private marginal cost.
b. be equal to private marginal cost.
c. fall short of private marginal cost.
d. bear no significant relation to private marginal cost.
a
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How does price serve as a signal to resource owners?
What will be an ideal response?
A country has $40 billion of domestic investment and net capital outflows of -$20 billion. What is the country's saving?
a. -$60 billion b. -$20 billion c. $20 billion d. $60 billion
A decrease in the federal funds rate is an indication that monetary policy is expansionary.
Answer the following statement true (T) or false (F)
Refer to the diagram and assume that prices and wages are flexible both upward and downward in the economy. In the extended AD-AS model:
A. demand-pull inflation would involve a rightward shift of curve A, followed by a rightward
shift of curve C.
B. cost-push inflation would involve first a leftward shift of curve C, then a rightward shift of curve C.
C. recession would involve a leftward shift of curve A, followed by a leftward shift of curve C.
D. recession would involve a rightward shift of curve D, followed by leftward shifts of curves A
and C.