Because in any period of time and in any region the quantity of pollutants that can be absorbed by nature is fixed, the supply of "pollution rights" in a cap-and-trade system will be perfectly elastic (horizontal).
a. true
b. false
Answer: b. false
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In words, the equation of exchange says that
A) the total amount spent on final output equals the amount received for final output. B) the amount of money in circulation equals the velocity of the price level. C) changes in the money supply will have no impact on the amount spent on final output. D) when velocity equals 1, nominal GDP equals the price level.
The circular flow model is all of the following except
a. an abstraction from reality b. a model of two markets c. a model of two agents d. a simple economic model e. designed to aid policy makers
The table above shows the payoff matrix for a prisoners' dilemma game. The Nash equilibrium is that
A) both prisoners do not confess. B) both prisoners confess. C) prisoner A confesses while prisoner B does not confess. D) prisoner A does not confess while prisoner B confesses.
Risk premiums rise sharply in a financial crisis.
Answer the following statement true (T) or false (F)