Who gains surplus when consumers in a market are given a Pigouvian subsidy for a positive externality?
A. Others affected by the externality
B. Both consumers and producers gain surplus.
C. Producers
D. Consumers
Answer: B
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If you take out a mortgage with a nominal interest rate of 8% and you expect the inflation rate to be 2%, but the actual inflation rate turns out to be 8%, then you end up paying a real interest rate of
A) 0%. B) 1%. C) 2%. D) 6%.
The price level rises in the short run if
A. aggregate demand or aggregate supply shifts right. B. aggregate demand shifts right or aggregate supply shifts left. C. aggregate demand shifts left or aggregate supply shifts right. D. aggregate demand or aggregate supply shifts right.
A firm would most likely use a large advertising campaign for which of the following products?
a. flour b. bread c. celery d. iron
The central banking system of the United States:
a. Federal Reserve b. National Bank of Washington D.C. c. Dow Jones Stock Exchange d. NASDAQ Exchange