What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output
B) finding a way to address cross-border pollution
C) limiting the extent to which domestic firms can outsource production
D) prohibiting economic activities that create externalities
A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The money-creation multiplier is affected by the
A) public's demand for currency as a proportion of demand deposits. B) bank reserve-holding ratio as a proportion of demand deposits. C) rediscount rate applied to loans from the Fed to banks. D) Both A and B are correct.
In Argentina, agricultural production is directly related to
A) government subsidies. B) price controls. C) import tariffs. D) well-defined property rights..
Which of the following countries has a low level of trade by world standards but has typically shown large trade surpluses in recent decades?
a. United States b. Brazil c. Japan d. France