Why do economists believe that it is socially optimal to have some amount of pollution?
What will be an ideal response?
Economists recognize the trade-off between producing a cleaner environment and producing other goods and services. Zero pollution could be achieved only if people give up resources for producing other goods and services. The optimal amount of pollution is therefore determined by equating the marginal cost and marginal benefit of reducing pollution at very high levels of pollution abatement, and the marginal cost for zero pollution is much higher than its marginal benefit.
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A movement along the consumption function is caused by a change in:
a. the price level. b. autonomous consumption. c. real disposable income. d. the stock of durable goods.
Starting from long-run equilibrium, the long-run impact(s) of a sharp drop in oil prices, compared to the original equilibrium, is(are):
A. the same inflation and the same output. B. lower inflation and lower output. C. higher inflation and the same output. D. higher inflation and lower output.
What is the difference between adaptive expectations and rational expectations?
What will be an ideal response?
What is the primary reason for the differences between the U.S. banking system and those in other major industrial countries?
A) Economies of scale are greater in banking in the United States than in banking in other countries. B) legislation that led to the development of state and national banks C) the Federal Reserve System D) the National Bank