According to the theory of purchasing power parity, the real exchange rate between two currencies will equal ________ in the long run.
A. 1.
B. the nominal exchange rate
C. the ratio of the rates of inflation of the two currencies.
D. 0.
Answer: A
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Consider the stock of ocean tuna which is massively overfished. It is rational for an individual to exploit the resource rather than to conserve the stock because
A) the marginal private benefit of harvesting tuna is lower than the marginal social benefit of harvesting it. B) the marginal private cost of harvesting the fish is lower than the marginal social cost. C) the marginal social cost of harvesting the fish is lower than the marginal private cost. D) the marginal private benefit of harvesting tuna is higher than the marginal social benefit of harvesting it.
The vicious circle of poverty refers to the fact that in LDCs,
a. low living standards lead to declines in population growth b. consumption goods are preferred to capital goods c. people are poor because land is scarce d. there are too many older people e. poverty leads to low investment in capital goods
With a tax, the reduction in total surplus is partially offset by the tax revenue
a. True b. False Indicate whether the statement is true or false
The technology-based effluent limitations
a. are performance-based standards b. do not make distinctions based on the age of the industrial facility c. are applicable only to nonpoint polluting sources d. have been eliminated from U.S. water quality policy