If the costs of coordination and enforcement are ________ the surplus lost to the externality, then ________.
A. lower than; a private solution will not work
B. higher than; a private solution will work
C. higher than; a private solution will not work
D. None of these statements is true.
Answer: C
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You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that
A) there might be false causality between inflation and the interest rate. B) higher inflation rates must cause a higher interest rate. C) a scatter diagram of the inflation rate and the interest rate will show a positive relationshi
A currency drain occurs because people want to hold some of their money as currency rather than as deposits
Indicate whether the statement is true or false
In response to an unanticipated tightening of monetary policy, the price level ________ at first, then ________ after a year
A) rises; returns most of the way to its original value B) falls; returns most of the way to its original value C) remains roughly unchanged; begins to rise D) remains roughly unchanged; begins to fall
Import tariffs in the United States are likely to reduce U.S. exports, both because of the resulting decrease in foreign earnings of dollars from exports to the United States and because of the likelihood of increases in other countries' import restrictions against U.S. goods
a. True b. False Indicate whether the statement is true or false