Explain what a "cap and trade" program is and how it works. Does the U.S. have a cap and trade program? If so, is it successful?
In a "cap and trade" program, the EPA sets limitations on emissions of certain pollutants, and issues a number of permits (allowances) which firms may sell or purchase, within that cap. Such a program was in operation for Sulfur Dioxide (SO2), and as a result, SO2 emissions were reduced. However, the program was challenged successfully in court, and the sale price of permits dropped from $390 per ton to $70 per ton. Nevertheless, the EPA's program is still functioning, and it affords firms an alternative to the installation of costly pollution control technologies. The program requires rigorous monitoring and reporting, and firms that emit above the legal limit pay automatic fees to the government. Many other countries around the world have cap and trade programs, which operate successfully to reduce pollution emissions.
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An increase in nominal GDP could result from an increase in
i. production. ii. prices. iii. subsidies. A) i only B) ii only C) i and ii D) i and iii E) i, ii, and iii
In the above figure, the y-coordinate of point b is
A) 1. B) 2. C) 3. D) 14.
When the interest rate is below the equilibrium level,
a. the quantity of money that the Federal Reserve has supplied exceeds the quantity of money that people want to hold. b. people respond by selling interest-bearing bonds or by withdrawing money from interest-bearing bank accounts. c. bond issuers and banks respond by lowering the interest rates they offer. d. All of the above are correct.
The market tends to overproduce goods that have external costs because
A. Producers experience higher costs than society. B. Producers do not take into account those external costs that they don't have to pay. C. The government is not able to produce these goods. D. Producers cannot keep the goods from consumers who don't pay, so they produce a greater amount.