Explain how government intervention can improve economic efficiency in a market with a negatively externalize
Please provide the best answer for the statement.
When a negative external is present in the market, products are overproduced. Costs may be borne by third parties rather than producers. The government can reduce overproduction by taxing the good, or limiting production in other ways. This forces a limit on production, moving the market toward the efficient outcome.
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Unpredictable changes in the value of money, which brings about gains and losses, are a consequence of unpredictable changes in
A) real GDP. B) unemployment rate. C) inflation. D) productivity.
Suppose the Fed decreased the growth rate of the money supply. Which of the following would be lower in the long run?
a. both the natural rate of unemployment and the inflation rate b. the natural rate of unemployment, but not the inflation rate c. the inflation rate, but not the natural rate of unemployment d. neither the natural unemployment rate nor the inflation rate
The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output,
A) resource allocation is efficient. B) resource allocation is inefficient. C) too few tons of fertilizer are produced. D) consumers must pay too high a price for fertilizer.
The quantity theory of money is most likely to be relevant
a) when money supply growth is 2% or less b) as a short-term policy prescription c) for economies on the gold standard d) as a long run explanation for inflation e) when the velocity of money is volatile