The economic approach to all of the external costs associated with automobiles is:
A. government setting a maximum on each type of external cost.
B. government subsidy.
C. internalizing the external costs using an optimal tax.
D. All of these
Answer: C
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Which of the following types of financial institutions is required to belong to the Federal Reserve System?
a. National banks. b. State-chartered banks. c. Savings and loan institutions. d. Credit unions.
Total surplus = Value to buyers - Costs to sellers
a. True b. False Indicate whether the statement is true or false
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
Stable inflation implies:
A. that the rate of inflation conceals relative price changes. B. that inflation is predictable. C. that the rate of inflation averaged over many years is zero. D. low rates of unemployment.