If you burn garbage in your backyard and the smoke damages a neighbor's house, the damage is considered an externality.
Answer the following statement true (T) or false (F)
True
The externality is the cost of the house damage paid by the neighbor (third party).
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The definition of economic growth is the annual percentage
A) increase in the per capita real GDP. B) increase in the per capita nominal GDP. C) increase in the total nominal GDP. D) increase in total exports.
If nations trade on the basis of comparative advantage
A. a nation can usually gain only it has an absolute advantage. B. all trading partners share equally in the gain. C. all trading partners share in the gain with distribution determined by their negotiating ability. D. a nation with an absolute advantage gains more than the other nations.
A reduction in the real exchange rate will cause
A) a reduction in net exports. B) a reduction in the quantity of imports. C) a reduction in output. D) an increase in government spending. E) all of the above
With graph on interest rate and planned investment (downward sloping): Planned investment could increase from $8 million to $12 million if
A) the government increases government purchases. B) the government decreases net taxes. C) the Fed sells bonds in the open market. D) the Fed reduces the required reserve ratio.