Which one of the following government actions is intended to generate positive externalities?
A. Subsidies for planting trees on hillsides
B. Requiring autos to meet minimum emissions regulations
C. Speed limits on the highways
D. Taxing polluting industries
Answer: A
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An overvalued exchange rate is an exchange rate:
A. that equals the number of units of a foreign currency over the number of units of domestic currency. B. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal. C. that has an officially fixed value greater than its fundamental value. D. that has an officially fixed value less than its fundamental value.
The unemployment rate is calculated as:
A) (number of unemployed) ÷ (number of employed + number of unemployed). B) (number of unemployed) ÷ (number of employed). C) (number of employed + number of unemployed) ÷ (labor force). D) (labor force) ÷ (number of unemployed).
If the multiplier is 6 and if there is no crowding-out effect, then a $60 billion increase in government expenditures causes aggregate demand to
a. increase by $250 billion. b. increase by $333 billion. c. increase by $360 billion. d. None of the above are correct.
To persist, a monopoly must:
a. be regulated. b. set its price to eliminate the deadweight loss. c. be a natural monopoly. d. be protected by a barrier against the entry of other firms.