The government can act to internalize externalities by taxing goods that have negative externalities and subsidizing goods that have positive externalities
a. True
b. False
Indicate whether the statement is true or false
True
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In the short run, which one of the following causes a competitive firm to hire more labor?
A) an increase in wage rate B) an increase in the output price C) a specific tax imposed on the firm's output D) a decrease in the output price
Scarcity
A. necessitates choice among consumer goods. B. of income renders purchase decisions interdependent. C. affects all consumer decisions. D. may involve forgoing the pleasure of one good in order to enjoy another. E. All of the above answers are correct.
In the Keynesian model, which of the following will cause a reduction in interest rates?
A) An increase in money demand B) An increase in money supply C) An increase in saving D) A decline in saving
A central tenet of the position against policy activism is that
A) consumption spending is highly unstable. B) consumption spending is highly stable. C) aggregate policies have little effect on consumption. D) instability in private consumption will always be offset by variations in other elements of private spending.