There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________
A) the cap-and-trade policy will not make the amount of pollution efficient
B) Joe's industry will sell permits to Harry's industry
C) Harry's industry will sell permits to Joe's industry
D) Harry's industry and Joe's industry will emit the same quantity of sulfur dioxide
B
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In a fixed exchange rate system,
A. A balance-of-payments deficit can be corrected by expansionary fiscal and expansionary monetary policies. B. A country can eliminate a surplus of its currency by eliminating its protectionist barriers to trade. C. The capital account surpluses must offset current account deficits. D. Excess demand for a currency is eliminated by using foreign exchange reserves to increase demand.
In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the required reserve/deposit ratio is 15 percent. If the Central Bank lowers the required reserve/deposit ratio making the new desired ratio equal to 10 percent, then the money supply in Macroland will ________ to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A. decrease; 5,000 B. increase; 5,000 C. decrease; 4,000 D. increase; 4,000
Markets in which firms sell their output of goods and services are called:
A. command markets. B. resource markets. C. product markets. D. mixed markets.
The fundamental identity of national income accounting is
A. total production = total income - total expenditure. B. total production = total income = total expenditure. C. total production = total income/total expenditure. D. total production = total income + total expenditure.