In the case of a negative externality, the government can use a ________________ to turn an inefficient outcome into an efficient one. In the case of a positive externality, the government can use a ________________ to turn an inefficient outcome into an efficient one.
A. tax; subsidy
B. subsidy; tax
C. tax; tax
D. subsidy; subsidy
Answer: A
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If consumer preference for a product increases, this will cause the equilibrium price of the product to go down, and the equilibrium quantity of the product to go u
Indicate whether the statement is true or false
The U.S. experience with expansionary measures from 1930 to 1945
a. repudiated the pump-priming theory. b. verified the pump-priming theory. c. repudiated the multiplier theory. d. repudiated the deficit-spending theory.
If the United States experiences an economic boom, compared to other countries, how will this affect the value of the U.S. dollar?
A. It will fall because other nations would be forced to raise their interest rates. B. It will fall because the United States will import more goods and services, leading to an increased supply of dollars. C. It will rise because U.S. GDP would be rising faster than other countries. D. It will rise because the Fed will have to lower U.S. interest rates.
Government regulation is designed to change both the structure of an industry and the behavior of firms in the industry.
Answer the following statement true (T) or false (F)