Under a system of marketable pollution permits:
A. pollution will increase.
B. firms may trade the right to pollute a certain amount.
C. firms can only buy the right to pollute from the government.
D. the government is not involved.
Answer: B
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Suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the
A) U.S. dollar appreciates by 2 percent a year. B) U.S. dollar depreciates by 2 percent a year. C) U.K. pound depreciates by 2 percent a year. D) None of the above answers is correct because interest rate parity requires that the interest rates be the same in both countries.
In the long run, changes in the money supply affect only the price level because
a. the aggregate demand curve is vertical. b. the aggregate demand curve is downward sloping. c. the long-run aggregate supply curve is vertical. d. the long-run aggregate supply curve is upward sloping. e. current real GDP is less than the economy's potential GDP.
The first year of his catering business, Zander was busy both days every weekend working special events. The second year, he raised his rates and was able to take one Sunday off a month. Which of the following describes his labor supply curve?
a. U-shaped b. upward sloping c. downward sloping d. backward bending
A dominant strategy is one that:
A. maximizes profits. B. is optimal under some conditions. C. never yields a negative payoff. D. is the best choice under all conditions.