Refer to the given data. If Landia and Scandia fully specialize based on comparative advantage, their aggregate output will be:
Answer the question on the basis of the following production possibilities data for Landia and Scandia:
A. 48 chips and 8 fish.
B. 40 chips and 16 fish.
C. 36 chips and 10 fish.
D. 42 chips and 12 fish.
B. 40 chips and 16 fish.
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Answer the following statement(s) true (T) or false (F)
1. A Pigou tax forces car manufacturers to internalize the cost of pollution. 2. Cap and Trade is so named because the government puts a “cap” on the amount of exports that domestic firms are allowed to “trade” with foreign nations. 3. A Cap and Trade system is more prone to error than a Pigou tax. 4. Pigou taxes are unnecessary in the presence of transaction costs. 5. Pigovian analysis indicates that a subsidy should be awarded when economic activity creates social benefits.
Suppose there is a tax increase. To stabilize output, the Federal Reserve will
a. increase government spending. b. increase the money supply. c. decrease government spending. d. decrease the money supply.
The term ceteris paribus is an economic assumption that means
A) let the buyer beware. B) logical common sense. C) the detail is in the interrelationship. D) other things being equal.
Why are U.S. banks prohibited from owning stocks?
What will be an ideal response?