A person who lives in a good-climate city says, "It's expensive to live here, but at least the climate is free." In terms of a theory advanced in the textbook, this person has either forgotten or is unaware that
A) New York City is not a good-climate city and it is expensive to live there. In other words, not all good-climate cities are expensive and not all bad-climate cities are cheap.
B) part of the reason it's expensive to live in the city is because of the good climate.
C) good-climate cities have more outdoor entertainment entities and activities and therefore people have to pay higher taxes to support those entities and activities.
D) there is a sunshine tax in most of the country - the more hours of sunshine a day, the higher the tax.
E) none of the above
B
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If we consider the equation PAE = A + bY the independent part of the equation that depends on income is:
A. b B. Y C. A D. PAE
According to the traditional (crowding-out) view, which of the following is most likely to result if a substantial portion of government expenditures is financed by borrowing rather than taxation?
a. no change in interest rates and an increase in saving b. higher interest rates and an outflow of foreign capital c. higher interest rates and a reduction in private domestic investment d. lower interest rates and an inflow of foreign investment
The amount of land covered by forests is:
A. declining in all nations. B. increasing in all nations. C. increasing in places like the United States and Western Europe, while declining in countries in South and Central America. D. declining in places like the United States and Western Europe, while increasing in countries in South and Central America.
Which of the following tools of monetary policy is flexible and able to affect bank reserves quickly and by relatively specific amounts?
A. The discount rate. B. The reserve ratio. C. Open-market operations. D. The federal funds rate.