Cap and Trade is a system aimed at correcting for externalities by
a. imposing taxes.
b. establishing tradable permits.
c. placing quotas on specific firm’s output.
d. limiting exports.
b. establishing tradable permits.
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When the Fed lowers the federal funds rate, it can lead to
A) the Fed selling government securities. B) an increase in lending by banks. C) a decrease in demand deposits. D) a decrease in the quantity of money.
A variable that tends to move at the same time as aggregate economic activity is called
A) a leading variable. B) a coincident variable. C) a lagging variable. D) an acyclical variable.
Assume the M2 multiplier is 3 and the reserve ratio is 10%. If the central bank buys $100 million of government securities from banks, the banking system's reserves will:
a. Rise by $10 million. b. Rise by $100 million. c. Fall by $100 million. d. Fall by $10 million. e. Not change.
A shift of the supply curve is caused by a change in a good's own price.
Answer the following statement true (T) or false (F)