Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is .75. The federal government now finds that it must increase spending on military goods by $21 billion in response to deterioration in the international political
situation. To sustain full- employment-noninflationary GDP, government must:
A. reduce taxes by $28 billion.
B. reduce transfer payments by $21 billion.
C. increase taxes by $21 billion.
D. increase taxes by $28 billion.
D. increase taxes by $28 billion.
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The production of an industrial good in a plant emits harmful gases that cause breathing difficulty. Which of the following will happen if the government imposes a Pigouvian tax on the plant?
A) Marginal external cost will increase. B) Marginal private cost will fall. C) The quantity supplied of the good will decrease. D) The demand for the good will increase.
More cattle are found to have mad cow disease. As a result, consumer confidence in the safety of beef is shaken. What would an economist predict will happen in the beef market?
A) As consumer preferences move away from beef, there is an upward movement along the beef demand curve. B) The demand curve will shift to the left. C) The demand curve does not shift but consumers move to a point lower down the curve. D) absolutely no change in either the quantity demand or the demand for beef
Which of the following would indicate the beginning of an expansionary phase in an economy?
a. A minor increase in the number of new firms b. A decline in stock market prices c. An improvement in consumer confidence d. A slowdown in housing construction e. A decrease in the number of orders for new equipment
Answer the following statement(s) true (T) or false (F)
1. The technology-based effluent limitations are actually performance-based standards. 2. All point sources are subject to effluent limitations, which are imposed uniformly within each designated group. 3. The National Pollutant Discharge Elimination System (NPDES) is a permitting system solely for publicly owned treatment works (POTWs). 4. An advantage of the effluent limitations is that they are aligned with the national water quality objectives. 5. If the effluent limitations are insufficient for a water body, that water body is considered to be “water quality limited,” requiring more stringent controls called total maximum daily loads (TMDLs).