If the production of a particular good involves significant external costs, to force the externality to be internalized the government might:
a. impose a tax on production of the good in order to increase production.
b. impose a tax on production of the good in order to decrease production.
c. offer a subsidy for production of the good in order to increase production.
d. offer a subsidy for production of the good in order to decrease production.
b
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Most economists agree that the best rate of inflation for a stable economy would be around:
A. zero. B. two to three percent. C. five to six percent. D. seven percent.
Suppose that the U.S. dollar-pound sterling spot exchange rate equals $1.60/£, while the 360-day forward rate is $1.64/£. The yield on a one-year U.S. treasury bill is 9 percent and that on a one-year UK treasury bill is 8 percent. Calculate the covered interest differential in favor of London. On the basis of this result, which country would you expect to have capital inflows and which to have capital outflows?
What will be an ideal response?
The impact of technological change in the health care area has been to
A. increase the quality of health care while decreasing the costs. B. increase both the quality of health care and the costs of health care. C. reduce the quality of health care while raising the costs. D. reduce the cost of health care.
When Carvana sold stock to the public in its IPO, it did so through the New York Stock Exchange. This is an example of Carvana raising funds through
A) reinvesting retained earnings. B) a financial intermediary. C) dividend reinvestment. D) a financial market.