Assume that production from an electric utility caused acid rain and that the government imposed a tax on the utility equal to the cost of the acid rain. This is an example of
A) a transactions cost.
B) a Pigovian tax.
C) a Pigovian subsidy.
D) the Coase Theorem.
Answer: B
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U.S. real GDP
A) measures the change in the price level over time. B) precisely measures the improving standard of living in the United States. C) excludes the value of underground production and leisure time. D) includes the value of underground production but excludes the value of leisure time. E) is not as accurate as nominal GDP when measuring standard of living changes over time.
The Economic Freedom Index includes which of the following measures of economic freedom within a nation?
A) Levels of economic regulation B) Freedom of pricing C) Stability of monetary policy D) Taxation levels E) All of the above.
Most securities traded in the United States are
a. secondhand securities bought by individuals b. secondhand securities bought by institutional investors c. new securities bought by institutional investors d. new securities bought by banks and insurance companies e. new securities bought by individuals
A managed float
a. is an attempt to maintain a stable exchange rate b. is invariably unsuccessful c. is invariably successful d. is an attempt to let the price level float upward e. is an attempt to get the interest rate to float upward