Taxation may improve the social welfare when the taxed good
a. is socially undesirable (like, in some views, liquor and pornography).
b. imposes negative externalities.
c. is overproduced under a free-market system.
d. All of the above are correct.
d
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If net exports are positive
A) net foreign investment is also positive. B) net foreign investment is negative. C) capital inflows must be greater than capital outflows. D) Both A and B are correct.
Due to the private nature of bank ownership, there is often a difference between bankers’ goals and macroeconomic objectives.
Answer the following statement true (T) or false (F)
In a natural monopoly,
a. society would be better off if antitrust laws were used to create many different firms in the market. b. the marginal cost curve is positively sloped. c. if the government requires marginal cost pricing, it will likely have to subsidize the firm. d. the marginal revenue curve is horizontal.
If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will
A. fall, causing households and businesses to hold more money. B. rise, causing households and businesses to hold more money. C. fall, causing households and businesses to hold less money. D. rise, causing households and businesses to hold less money.