What is the rationale behind a tradable emission allowance scheme?
A) to create a market for externalities: the scheme brings together buyers and sellers of marketable permits
B) to discipline polluting firms by specifying the maximum amount of emissions allowed and giving them permits to pollute up to their allowance
C) to raise revenue for the government through the sale of emission permits and at the same time set an emissions target
D) to provide firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance
Answer: D
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Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?
A) Real wages for hospital employees will fall. B) The increase in inflation is expected. C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.
International trade between countries typically produces a winner and a loser. Generally, it is the economically more advanced country that gains at the expense of the less developed nation
a. True b. False
If national saving in a closed economy is greater than zero, which of the following must be true?
a. Either public saving or private saving must be greater than zero. b. Investment is positive. c. d. All of the above are correct.
According to economists
A) market capitalism is the best system available and some government intervention and regulation can either help or harm the social interest. B) market capitalism is the best system available and any government intervention and regulation will inevitably harm the social interest. C) centrally planned socialism is the best system available since governments generally make decisions that are in social interest. D) centrally planned socialism and pure market capitalism are equally capable of promoting social interest, but a mixed economy is an undesirable compromise between the two that will harm social interest.