A significant bank crisis in one Eurozone country is a problem for the ECB because:
A) it will violate its money supply growth rule if it tries to provide liquidity to that country's banks.
B) it has no mandate to be a lender of last resort to financial institutions in the Eurozone.
C) it has no ability to affect the money supply in Eurozone countries.
D) its consensus decision-making process may prompt too rapid a reaction to a crisis in one country.
Ans: B) it has no mandate to be a lender of last resort to financial institutions in the Eurozone.
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Answer the following statement(s) true (T) or false (F)
1. According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their individual abatement levels were equal. 2. According to the cost-effective abatement criterion, all polluting sources would abate pollution up to the point where their individual total abatement cost (TAC) levels were equal. 3. If the MACs for firm 1 and 2 are: MAC1 = 0.4A1 and MAC2 = 0.8A2, respectively, and the combined abatement standard is 15 units, then the cost-effective abatement levels are 10 units for firm 1 and 5 units for firm 2. 4. Suppose the combined abatement standard is set at 22 units and firm J and firm K have MAC functions of MACJ = 0.5A, and MACK = 0.75A, respectively. If firm J is abating 10 units and firm K is abating 12 units, firm K should abate more units and firm J should abate less.
Which government policy is the principal focus of Ricardian Equivalence?
A) tax cuts B) government spending increases C) government borrowing D) seignorage
Why is the price of a scarce exhaustible resource in a competitive market above the marginal cost of providing a unit of the resource?
What will be an ideal response?
Marginal costs and marginal benefits
A) do not include sunk costs. B) include sunk costs. C) are really just fixed costs. D) are not useful in decision making.