Suppose an ardent environmentalist sought to preserve limited natural resources for future generations. She would more than likely be arguing that oil and gas companies use an inappropriately
A. decreasing discount rate when considering optimal resource use.
B. flat discount rate when considering optimal resource use.
C. high discount rate when considering optimal resource use.
D. low discount rate when considering optimal resource use.
Answer: C
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In the view of the Classical economists, rising aggregate demand leads to
A) lower unemployment. B) inflation. C) higher unemployment. D) deflation.
Answer the following statement(s) true (T) or false (F)
1. Firms have an incentive to practice planned obsolescence, because it increases their volume of sales and gives them higher profits. 2. Artists as a whole would be better off if they received royalty payments each time their work was resold. 3. If an annual tax of $560 per acre is levied on land, then land values will fall by $560 per acre. 4. If water can be bottled at zero marginal cost, and if water prices are growing slower than the rate of interest, then owners would benefit by increasing their current bottling operations. 5. The market interest rate equals the absolute slope of the representative agent's indifference curve at the endowment point, minus 1.
Direct controls
A. have not been tried in practice, but work in theory. B. have been the main instrument used by the United States when dealing with polluting activities. C. achieve more success than pollution charges. D. achieve more success than pollution allowances.
The roles fulfilled by commercial banks and investment banks are:
A. often done by the same bank. B. always done by the same bank. C. not allowed to be done by the same bank. D. rarely done by the same bank.