It is difficult to get the necessary information to apply corrective taxes in the real world, thus _____
a. most government reluctantly apply to reduce negative externalities
b. use regulation to reduce negative externalities
c. use moral suasion to reduce negative externalities
d. most governments fail to do anything to reduce negative externalities
b
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Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will
A. attract other firms to enter the industry, causing the existing firms' profits to shrink. B. cause firms to standardize their product to limit the degree of competition. C. reduce the excess capacity in the industry as firms expand production. D. make the industry allocatively efficient as each firm seeks to maintain its profits.
"The real interest rate is found by dividing the nominal interest rate by the CPI." Is this statement true or false?
What will be an ideal response?
When the expenditure schedule is too high, the result is a(n)
a. unemployment surplus. b. inflationary gap. c. recessionary gap. d. budgetary gap.
Poverty is most likely to decrease when
A. Population increases regardless of what happens to economic growth. B. Economic growth exceeds population growth. C. Population growth exceeds economic growth. D. GDP increases regardless of what happens to population growth.