Which of the following statements concerning pollution is correct?
A) Economic efficiency requires that pollution be completely eliminated.
B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which price equals private marginal cost.
C) Pollution should be reduced to the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.
D) Pollution should be reduced to the extent necessary to return production to the production possibilities frontier.
C
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Suppose that the Fed makes a $100 billion open-market sale of Treasury bonds, and the money multiplier is 6 . Which of the following impacts aremostlikely to result?
a. The money supply shifts inward, and the equilibrium interest rate rises in the money market. b. The money supply shifts outward, and the equilibrium interest rate falls in the money market. c. Investment declines, causing the aggregate demand curve to shift leftward, reducing equilibrium real GDP and thus slowing the economy. d. Both a. and c. are correct. e. Both b. and c. above are correct.
A nation's infrastructure includes all of the following except its:
a. market system. b. educational system. c. energy system. d. railroad system. e. religious system.
Which of the following is not an example of a public good?
A. space exploration B. levees C. parks D. a Big Mac