In the balance of payments, "net errors and omissions":
a. Must be zero.
b. Is like a balancing item. It makes the balance of payments equal zero.
c. Is not a part of the balance of payments because governments don't make errors, and they don't omit transactions from the balance of payments.
d. None of the above.
.B
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Which of the following are the rules for finding the point of allocative efficiency?
A) Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. B) Produce on the PPF and then produce where marginal benefit equals marginal cost. C) Produce on the PPF and then produce where marginal benefit and marginal cost are constant. D) Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. E) Produce anywhere on the PPF.
If the price of golf balls increases, what will likely happen to the demand for golf club manufacturing employees?
A) It will increase. B) It will decrease. C) It will stay the same. D) Nothing, the two are not related.
Answer the following questions true (T) or false (F)
1. When negative externalities exist, the competitive market supply curve does not include all of the costs borne by members of society. 2. When a tax on output is imposed to internalize the external costs of pollution, the supply curve shifts down by the amount of the tax. 3. One problem with using a command-and-control approach to pollution reduction is that the monitoring costs may be too high.
Which of the following will be included in the calculation of GDP when using how expenditures to calculate it?
A) Dividends paid by firms to shareholders B) Wages paid to labor by firms C) Services purchased by the government D) Interest paid by households for loans