For voluntary action to correct an externality
A) transaction costs have to be high.
B) transaction costs have to be low.
C) transaction costs have to be split evenly between all of the parties involved.
D) transaction costs are irrelevant.
B
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In the figure above, assume that output is $10.5 trillion, while potential output is $12 trillion. Suppose that a combination of fiscal stimulus and recovery of consumer and business confidence shifts the IS and AD curves, as shown in the figure
The equilibrium real interest rate is ________ percent. A) 3 B) one C) 2.5 D) 2 E) zero
Banks will hold additional excess reserves when
a. loans to customers look safe and interest rates are high. b. they anticipate a bank audit. c. loans to customers look risky and interest rates are low. d. the economy is booming and there is a large demand for loans.
2.3 Discretionary Policy
What will be an ideal response?
In order to determine ____________, the firm's total costs must be divided by the quantity of its output.
a) average cost b) fixed costs c) diminishing marginal returns d) variable cost