If the price of marketable permits is kept very high, _____
a. the quantity of pollution in the economy will increase
b. a network externality will arise
c. firms will adopt more efficient pollution abatement equipment
d. environmental groups will start selling additional permits in the market
e. firms will have a greater incentive to pollute
c
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Changes in taxes and spending by the executive and legislative branches of a country's government that can be used to either stimulate or restrain the economy are called:
A) monetary policy. B) fiscal policy. C) foreign policy. D) exchange rate policy.
Which of the following is most likely to shift the potential output of an economy to the right?
a. A decline in the length of the average workweek b. An increase in the supply of educated and skilled workers c. A drought d. An increase in aggregate demand e. An increase in the minimum wage received by workers
The primary use of derivative contracts is:
A. for IRA and other pension plans since they only have value well into the future. B. to add to the profits an investor obtains through information asymmetry. C. to shift risk among investors. D. for investors seeking a greater return by taking greater risk.
If a bank has $1,000,000 in reserves and checking deposits of $3,000,000, what is the bank’s reserve position if the required reserve ratio is 20 percent?
A. The bank has $500,000 of required reserves and $500,000 of excess reserves. B. The bank has $600,000 of required reserves and $400,000 of excess reserves. C. The bank has $400,000 of required reserves and $600,000 of excess reserves. D. The bank has $200,000 of required reserves and $800,000 of excess reserves.