Which of the following is not a potential problem in using corrective taxation to deal with a negative externality?
a. Measuring the cost of the externality.
b. Estimating the supply curve of the externality creator.
c. Determining who is responsible for the externality.
d. Determining how the tax should be applied.
b
You might also like to view...
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
If individuals have money illusion then they
A) think that money is worthless. B) ignore the effects on their income or wealth of some price changes in the economy. C) they base their production and consumption decisions on relative rather than absolute prices. D) Both B and C.
If the Fed desired to reduce the federal funds rate,
A) it would conduct an open market sale, reducing reserve supply. B) it would conduct an open market purchase, increasing reserve supply. C) it would conduct an open market sale, increasing reserve demand. D) it would conduct an open market purchase, reducing reserve demand.
If chain-weighted increases in real GDP for 2002-03, 2003-04, 2004-05, 2005-06, and 2006-07 are 5%, 4%, 2%, 1%, and 3% respectively, and nominal GDP in the 2002 base year is $6244.4 billion, then chain-weighted real GDP for 2007 is
A) $6987.02 billion. B) $7,181.06 billion. C) $7235.6 billion. D) $7239.0 billion.