In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if real wealth decreases?
A) Nothing; the economy would remain at point a.
B) There would be a movement to a point such as b on supply of loanable funds curve SLF0.
C) The supply of loanable funds curve would shift rightward to a curve such as SLF2.
D) The supply of loanable funds curve would shift leftward to a curve such as SLF1.
C
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Under the market mechanism, a market characterized by external costs will produce too
A. Little output and too little pollution. B. Much output and too much pollution. C. Much output and too little pollution. D. Little output and too much pollution.
Gains from trade means that all trading nations must be made better off
Indicate whether the statement is true or false
Which of the following is included in the Pig Book?
a. New federal laws that serve only a local purpose b. Government programs that were recently expanded c. Legislators who regularly skip Senate hearings d. Judges who uphold questionable legislation
The major difficulty with using a tax on pollution instead of a fixed percentage reduction regulation is:
A. that it only works in theory. B. that it would cause prices to rise. C. that firms would not pay the tax. D. establishing the optimal size of the tax.