There are two coal-burning electrical utilities-one in tiny, rural Moscow, Idaho, and another in metropolitan Detroit, Michigan-and each produces the same amount of pollution per unit of output. If a permit tax is going to be used to force these firms to internalize pollution costs, the tax levied should be
A. higher in Detroit than in Moscow.
B. less than zero in each area.
C. the same in each city.
D. higher in Moscow than in Detroit.
Answer: A
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After the financial crisis in the 1990s many economists criticized the IMF and the World Bank. Some suggestions for reform are to
A) eliminate both the institutions. B) increase private-sector lending by governments providing tax breaks to lenders. C) create a board of directors made up of finance ministers for the IMF. D) all of the above
In the monetarist view, if there is an increase in money growth then
a. the money supply and inflation will grow proportionally, with no effect on output and employment. b. the money supply grows faster than the inflation rate, with unfavorable effects on output and employment. c. the money supply grows faster than the inflation rate, leading to an increase in output and employment in the short-run. d. there will be no effect on output, employment, or inflation, in the long-run. e. both c and d.
Federal Reserve regulations apply
a. to all banks in the United States b. only to member banks c. only to private commercial banks d. only to national banks e. only to state banks
____ is one in which exactly the amount one competitor gains must be lost by other competitors.
A. Nash equilibrium B. Prisoner’s dilemma C. A win-win situation D. A zero-sum game