Which of the following may reduce the MC of companies emitting SO2 pollution?
A. The government eliminated subsidies to companies for reducing pollution.
B. A study came out suggesting that additional cancers are linked to exposure to SO2 pollution.
C. The government is subsidizing scrubbers which are devices that can be used to remove some SO2 pollution.
D. Consumers are worried about the pollution and stopped buying the products from companies with high pollution.
Answer: C
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As the financial crisis became more severe in 2008, the Federal Reserve undertook a(n) ________ of monetary policy, an effect of which is to ________ inflation
A) contraction; raise B) easing; raise C) contraction; lower D) easing; lower E) none of the above
The table above shows the payoff matrix for a prisoners' dilemma. In the Nash equilibrium
A) both prisoners get 3 years in jail. B) both prisoners get 2 years in jail. C) both prisoners get 1 year in jail. D) both prisoners get 10 years in jail.
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserves account in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and reserves account becomes more negative (or less positive). b. The real risk-free interest rate falls, and reserves account becomes more negative (or less positive). c. The real risk-free interest rate falls, and reserves account remain the same. d. The real risk-free interest rate rises, and reserves account remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Give an example that shows how price level can shift the money demand curve and another that shows how RGDP can shift this curve.
What will be an ideal response?