One reason why the plants of multinational corporations abroad may have better standards than domestic contractors in low-income countries is because multinational corporations tend to reduce costs by using one standard in terms of capital equipment
and technology for all markets. Indicate whether the statement is true or false
TRUE
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To eliminate the inefficiency resulting from pollution that creates an external cost, the government can impose a pollution tax on producers that is equal to the
A) MSB. B) MC. C) marginal external cost. D) MSC. E) price.
The most commonly used tool by the Federal Reserve to control the monetary base is
a. changes in the discount rate. b. changes in tax rates on commercial banks. c. changes in legal required reserve ratios. d. open market operations.
Under a flexible exchange rate system, which of the following will be most likely to cause an appreciation in the exchange rate of the dollar relative to the English pound?
a. an economic boom in England, inducing English consumers to buy more American-made automobiles, trucks, and computer products b. higher real interest rates in England c. inflation in the United States while prices are stable in England d. attractive investment opportunities in England, inducing U.S. investors to buy stock in English firms
When goods are subject to market failure, all of the following are possible solutions to the market failure except:
A. privatize the good. B. have government either regulate the market or provide the good. C. set a very specific consumer quota on consumption. D. change social norms.