From the point of view of a particular country, capital outflows are:
A. purchases of foreign goods or services by domestic households or firms.
B. purchases of foreign assets by domestic households or firms.
C. purchases of domestic goods or services by foreigners.
D. purchases of domestic assets by foreigners.
Answer: B
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The Friedman-Savage utility function can explain why
A) people buy automobile insurance. B) somebody becomes addicted to gambling. C) people become more risk averse as their wealth increases. D) people place small bets to have a chance at winning a large amount.
The genuine progress indicator provides a measure of social progress that:
A. focuses entirely on economic activity. B. ignores economic activity. C. is explicitly not based on value judgments. D. is explicitly based on value judgments.
Suppose a firm wants to build a new factory that would add pollution to an already polluted area. Under an offset program, the firm must:
A. install scrubbers and other government-mandated equipment. B. purchase pollution permits from the government. C. reduce or eliminate an old pollution source in the area. D. pay a tax which depends on the amount of pollution created.
If income falls below its potential and the income tax rate is reduced, this will:
A. raise the cyclical deficit but reduce the structural deficit. B. reduce the cyclical deficit but raise the structural deficit. C. reduce both the cyclical and structural deficits. D. raise both the cyclical and structural deficits.