The World Trade Organization (WTO) is an international organization dedicated to erecting trade barriers between nations
Indicate whether the statement is true or false
FALSE
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
What is a marginal cost?
What will be an ideal response?
Potential weaknesses of nominal GDP targeting include
A) it requires accurate estimates of potential GDP growth, which are not easy to achieve. B) it implies that the central bank will respond to slowdowns in the real economy even if inflation is not falling. C) real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy. D) it focuses not only on controlling inflation but also explicitly on stabilizing real GDP.
In the presence of a negative externality, a specific tax can achieve the social optimum because
A) output is reduced to zero as a result. B) it internalizes the external cost. C) it directly charges the producer for polluting. D) the price of the good rises by the full amount of the tax.