Additional highway traffic
a. creates a positive externality
b. creates a negative externality when a highway is congested
c. creates a negative externality even if a highway is not congested
d. is Pareto optimal
e. requires a side payment
B
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What is the distinction between nominal GDP and real GDP?
What will be an ideal response?
Discuss the values of private saving in closed and open economies
What will be an ideal response?
In any year, nominal GDP divided by the GDP chain price index equals real GDP
a. True b. False Indicate whether the statement is true or false
During the economic downturn of 2008-2009, the Federal Reserve
a. used open-market operations to purchase mortgages and corporate debt, just as it frequently does even when the economy is functioning normally. b. took the unusual step of using open-market operations to purchase mortgages and corporate debt. c. explicitly set its target rate of inflation at zero. d. explicitly set its target rate of inflation well above zero.