Which of the following is a TRUE statement?
A. Voluntary agreements can solve externality situations by making the party incurring the costs bear the costs of his or her actions.
B. Externalities can only be handled by government regulation and emission taxes cannot work effectively.
C. Externalities would never be a problem if people were willing to comply with government regulations.
D. Externalities cannot be solved by market solutions and always require government action.
Answer: A
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Government policies intended to increase aggregate spending and output are called ________ policies.
A. expansionary B. aggregate C. fiscal D. monetary
The long-run aggregate supply curve is a vertical line passing through
A) the natural rate of output. B) the natural-rate price level. C) the actual rate of unemployment. D) the expected rate of inflation.
How would each of the following affect the firm's marginal, average, and average variable cost curves?
a. An increase in wages b. A decrease in material costs c. The government imposes a fixed amount of tax. d. The rent that the firm pays on the building that it leases decreases.
In the past, there was a strong correlation between ice cream consumption by children and polio cases for children. There was not a causal relationship due to:
A. a common underlying omitted variable. B. reverse causality. C. accounting fraud practiced by Baskin Robbins. D. an infection present in cherries.