To internalize the external costs of pollution is to:
A. make the polluter pay all of the costs associated with the polluting activity.
B. require that private citizens rather than taxpayers pay for the harmful effects of pollution.
C. levy taxes on manufacturing firms located in crowded urban areas.
D. auction off pollution rights to those willing to pay the most for them.
Answer: A
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A key factor that leads to economic growth is
A) human capital accumulation. B) increasing current consumption. C) avoiding the opportunity cost of investment. D) Both answers A and B are correct.
A clinic uses doctors and nurses optimally and is servicing the maximum number of patients given a limited annual payroll. The last doctor hired treated 1,600 extra patients in a year, while the last nurse hired treated 1,000 extra patients in a year. If doctors make $40,000 a year, what do nurses make?
A. $15,000 a year B. $25,000 a year C. $20,000 a year D. $10,000 a year
When comparing a $100 billion increase in government expenditure to a $100 billion decrease in tax revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease. B) equal to the effect of the tax decrease. C) less than the effect of the tax decrease. D) positive whereas the effect of the tax decrease is negative. E) negative whereas the effect of the tax decrease is positive.
In the national income accounting identity Q = C + S + T, T stands for
A) taxes. B) transfers. C) taxes minus transfers. D) taxes plus transfers.