In the case of a negative externality, in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________
A) tax; external costs
B) tax; external benefits
C) subsidy; external costs
D) subsidy; external benefits
E) tax; private costs
A
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Personal consumption expenditures is the smallest component of total spending
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true?
a. The speculative demand for money at possible interest rates gives the demand for money curve its upward slope. b. There is an inverse relationship between the quantity of money demanded and the interest rate. c. According to the quantity theory of money, any change in the money supply will have no effect on the price level. d. All of these are true.
Empirical evidence indicates that imposing taxes on polluting emissions by firms
a. has no effect on the amount of pollution emitted. b. does not give the government leeway to regulate more dangerous emissions differently than less dangerous emissions. c. does reduce the amount of pollution emitted. d. discourages firms from investing in new methods of pollution abatement.
When the government finances a shovel-ready project through taxes or borrowing, this will result in
What will be an ideal response?