The marginal cost of pollution abatement is the
A. total social costs of pollution clean-up divided by total social benefits.
B. additional benefit from cleaning up an additional unit of pollution.
C. additional cost to clean up an additional unit of pollution.
D. total social costs of pollution clean-up divided by the total units of clean-up.
Answer: C
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Cyclical unemployment results from
A. technological change. B. the decreasing relative importance of goods and the increasing relative importance of services in the U.S. economy. C. a deficiency of spending on goods and services. D. the everyday dynamics of a free labor market, with workers voluntarily changing jobs.
Refer to Figure 7-2. Marginal private benefit is represented by which curve?
A) D2 B) Supply C) D1 D) All of the above represent marginal private benefit.
The federal government debt as a percentage of GDP did not rise
A) during World War II. B) during the 1980s. C) during the Great Depression. D) during the 1960s.
(Requires Internet Access for the test question) The following question requires you to download data from the internet and to load it into a statistical package such as STATA or EViews
a. Your textbook estimates an AR(1) model (equation 14.7) for the change in the inflation rate using a sample period 1962:I — 2004:IV. Go to the Stock and Watson companion website for the textbook and download the data "Macroeconomic Data Used in Chapters 14 and 16." Enter the data for consumer price index, calculate the inflation rate, the acceleration of the inflation rate, and replicate the result on page 526 of your textbook. Make sure to use heteroskedasticity-robust standard error option for the estimation. b. Next find a website with more recent data, such as the Federal Reserve Economic Data (FRED) site at the Federal Reserve Bank of St. Louis. Locate the data for the CPI, which will be monthly, and convert the data in quarterly averages. Then, using a sample from 1962:I — 2009:IV, re-estimate the above specification and comment on the changes that have occurred. c. Based on the BIC, how many lags should be included in the forecasting equation for the change in the inflation rate? Use the new data set and sample period to answer the question. What will be an ideal response?