A market for pollution rights can be expected to:
A. produce a shortage of pollution.
B. eliminate all pollution.
C. encourage potential polluters to increase emissions.
D. provide potential polluters with a monetary incentive to reduce emissions.
Answer: D
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The figure above represents the competitive market for slices of key lime pie. When 60 slices are produced, the marginal cost
A) exceeds the marginal benefit. B) is less than the marginal benefit. C) equals the marginal benefit. D) is not defined. E) equals the deadweight loss on the 60th slice.
Whenever the Fed ________ excess reserves in the banking system, they tend to ________ the overall money supply
A) raises; reduce B) raises; increase C) lowers; increase D) lowers; stabilize
To pay for a current account deficit, a country can
A) borrow money from abroad. B) lend money abroad. C) increase official reserves to cover the shortfall. D) transfer money from the capital account to the official settlements account.
Imperfect information is a rationale for regulation
a. True b. False Indicate whether the statement is true or false