How does a cap-and-trade system:
a. force polluters to internalize an externality?
b. lower transactions costs?
c. give incentive to polluters to find new ways to reduce pollution?
d. make future pollution reductions easy to implement?
a. For every ton of pollution emitted, the polluter must buy a pollution permit or use one they already own and could otherwise sell.
b. Since permits are tradeable, the polluters are able to bargain in terms of who will reduce emissions.
c. New, lower-cost ways to reduce pollution will require fewer permits that need to be purchased.
d. The government can simply reduce the number of permits it prints.
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Which of the following is a reason behind the rise in US trade over the last 80 years?
A) Rising government expenditure B) Improved bureaucracy C) Improved transportation technology D) Falling consumption expenditure
A rise in confidence is associated with higher consumption and investment demand, and leads to:
a. a downward shift in the AD curve. b. an inward shift in the AD curve. c. an outward shift in the AD curve. d. an upward shift in the AD curve.
Which of the following statements is incorrect?
a. Budget deficits raise the national debt. b. The concepts of deficit and debt are closely related. c. Getting rid of the deficit eliminates accumulated debt. d. Budget surpluses lower the national debt.
Refer to the accompanying figure. At a price of $3, there will be:
A. an excess supply of 2 units. B. an excess supply of 7 units. C. an excess demand of 7 units. D. an excess demand of 5 units.