On efficiency grounds, corrective taxes should not be given as compensation to those individuals harmed by negative externalities
a. True b. False
a
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People often complain about price gouging after a disaster such as a hurricane. Suppose the government successfully prevented price increases due to the disaster. We would expect
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly. B) reconstruction to take less time because the demand for materials would increase faster. C) reconstruction never to occur. D) reconstruction to take less time because the government could rebuild more quickly when people are not in the way.
From full long-run equilibrium, expectations of future exchange rates can only change when there is:
a. a political change. b. a permanent change in the quantity of money. c. a change in short-run interest rates. d. a temporary decrease in the quantity of money.
The equilibrium real interest rate is 5 percent. If the real interest rate is
A) anything other than 5 percent, the supply of loanable funds curve and/or the demand for loanable funds curve will shift to move the real interest rate to 5 percent. B) 6 percent, the demand for loanable funds curve will shift rightward as firms enter the market to borrow at the lower rate. C) 2 percent, there is a shortage of loanable funds. D) 8 percent, there is a surplus of loanable funds. E) 3 percent, then the supply of loanable funds curve will shift leftward as new savers enter the market.
An Internet start-up company consists of three people with an idea that they wish to use in pursuing a patent for a product. What type of capital does this company have and what is its value?
What will be an ideal response?