External costs can be defined as
A) the cost associated with private production, but partially borne by society.
B) the sum of all private production costs.
C) the cost of running the federal government.
D) the cost of providing all public goods and services.
Answer: A
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Suppose the demand curve for a product is vertical and the supply curve is upward sloping. If a per-unit tax is imposed in the market for this product
A) buyers share the burden of the tax with government. B) the tax burden will be shared equally between buyers and sellers. C) sellers bear the entire burden of the tax. D) buyers bear the entire burden of the tax.
According to the classical model, money influences
a. only prices. b. nominal and real variables in both the long and short-run. c. both nominal and real variables but only in the short-run. d. only nominal variables.
If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to
A) increase real Gross Domestic Product (GDP). B) increase the price level. C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag. D) decrease both real Gross Domestic Product (GDP) and the price level.
Given a one-year Canadian bond with a yield of 8 percent, what will be the U.S. investor's rate of return at maturity if the Canadian dollar appreciates 10 percent against the U.S. dollar?
a. 2 percent b. 8 percent c. 10 percent d. 18 percent e. 25 percent