Explain what a “cap and trade” program is and how it works. Does the United States have a cap and trade program? If so, is it successful?
What will be an ideal response?
In a “cap and trade” program, the EPA sets limitations on emissions of certain pollutants and issues a number of permits (allowances) that firms may sell or purchase, within that cap. Such a program was in operation for Sulfur Dioxide (SO2), and as a result, SO2 emissions were reduced. However, the program was challenged successfully in court, and the sale price of permits dropped from $390 per ton to $70 per ton. Nevertheless, the EPA’s program is still functioning, and it affords firms an alternative to the installation of costly pollution control technologies. The program requires rigorous monitoring and reporting, and firms that emit above the legal limit pay automatic fees to the government. Many other countries around the world have cap and trade programs, which operate successfully to reduce pollution emissions.
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Under the European System of Central Banks, the National Central Banks have the same role as the ________ of the Federal Reserve System
A) Board of Governors B) Federal Open Market Committee C) Federal Reserve Banks D) Federal Advisory Council
The structure of a macroeconomic model involves all of the following except
A) the available technology. B) the behavior of consumers and firms. C) the preferences of consumers. D) the available resources.
Based on the graph above, a cause of movement from point 1 to point 2 might be ________
A) a positive price shock B) government policy that lowers unemployment C) an increase in potential output D) an increase in expected inflation E) none of the above
Supply curves usually slope upward because producers face increasing opportunity costs when increasing output
a. True b. False