Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Figure 29.1Refer to Figure 29.1. If the condition of the economy at Point H is realized by policy makers when the economy is at Point I, policy is likely to be inappropriate due to
A. the implementation lag.
B. the response lag.
C. crowding out.
D. the recognition lag.
Answer: D
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A tax and a regulation that have the same effect on output in the short run will have different effects in the long run. _____ creates profits which encourages _____, while _____ creates losses and encourages _____
a. Corrective taxation; entry; regulation; exit b. Regulation; entry; corrective taxation; exit c. Corrective taxation; exit; regulation; entry d. Regulation; exit; corrective taxation; entry
This graph of negative externalities in production shows that the social costs of a negative externality are always ______ the private costs.
a. the inverse of
b. the same as
c. higher than
d. lower than
The current system of exchange rates can best be described as:
A. freely fluctuating exchange rates. B. managed floating exchange rates. C. rigidly fixed exchange rates. D. an adjustable peg system.
Related to the Economics in Practice on page 176: When there are a few unsold seats in an arena for a rock concert, the marginal cost of filling those seats
A. will be negative. B. is generally quite high. C. will primarily depend on the number of people waiting to get the seats. D. is probably close to zero.