The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase during the next decade, and due to these higher deficits, "the nation's capital stock ultimately would be smaller, and productivity and
income would be lower than would be the case if the debt was smaller." This higher budget deficit would be represented graphically by
A) a shift in the supply curve for loanable funds to the right.
B) a shift in the supply curve for loanable funds to the left.
C) a movement to the right along the supply curve for loanable funds.
D) a movement to the left along the supply curve for loanable funds.
Answer: B
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Marginal revenue product is the effect of a one-unit increase in an input on the cost of production.
Answer the following statement true (T) or false (F)
One problem with the effectiveness of Pigovian taxes is:
A. knowing whether to impose it on the consumer or producer. B. knowing what the value of the tax should be. C. identifying those who are affected by the externality. D. none of these are problems.
The ideal pollution tax adds how much to private cost?
a. as much as possible b. an amount that will maximize government tax revenue c. an amount equal to the market price d. an amount equal to the external cost e. nothing
A corrective tax: a. internalizes an externality
b. legislates what is allowable. c. increases the social costs of externalities. d. increases the deadweight loss caused by an externality.