Governments can increase the consumption of a product that creates positive externalities by
A) taxing the production and consumption of the product.
B) subsidizing the production of the product so that the supply is increased and market price is reduced.
C) convincing everyone to consume the product.
D) assigning property rights to the producers of the product.
B
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The reason that the claim that floating exchange rates result in greater economic autonomy for individual countries may not be entirely accurate is that
A) empirical research finds no supporting data. B) policy makers are influenced by the effect of domestic policies on the exchange rate. C) there is no generally satisfactory method for measuring economic autonomy. D) it is based on the assumption of a gold standard. E) countries that run large trade deficits must increase exports to balance trade.
A sudden rise in input prices which drives up the marginal cost of producing automobiles will shift the supply curve of automobiles upward
Indicate whether the statement is true or false
Use the following diagram to answer the next question.
All else equal, which of the following events would cause a shift from (I + G + NX)1 to (I + G + NX)2?
A. Government spending on national defense was reduced by $1 billion. B. The government cut taxes by $100,000 million. C. Russia purchased $75 million of wheat from domestic farmers. D. Businesses reduce their inventories by $20 million.
Government attempts to lower, raise, or simply stabilize prices can:
A. reduce efficiency of a market. B. shift the distribution of surplus. C. create unintended side effects. D. All of these are true.