With respect to their impact on aggregate demand for the U.S. economy, which of the following represents the correct ordering of the wealth effect, interest-rate effect, and exchange-rate effect from most important to least important?
a. wealth effect, exchange-rate effect, interest-rate effect
b. exchange-rate effect, interest-rate effect, wealth effect
c. interest-rate effect, wealth effect, exchange-rate effect
d. interest-rate effect, exchange-rate effect, wealth effect
d
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The difference between merchandise exports and imports is called the ________ balance
A) current account B) capital account C) official reserve transactions D) trade
Explain why taxes on pollutants reduce pollution while subsidies to firms cutting their pollutants actually increase pollution.
What will be an ideal response?
The framers of the Constitution sought to limit the economic role of the government as evidenced by
A) all of the above. B) the enumeration of the permissible powers of the federal government in Article I, Section 8. C) the 5th Amendment's limitation on the government's power to take private property. D) the 10th Amendment's allocation of all non-enumerated powers to the states and the people.
In order to achieve an efficient result, a pollution tax must:
A. be equal to the external cost generated. B. not be passed through to the consumers of the produced good. C. be equal to the social cost of production. D. be shared equally by the producer and the consumer of the produced good.