If the demand for Home exports decreased abroad, the Home fall in output would be greatest
A) if the decrease was temporary and the exchange rate was fixed.
B) if the decrease was temporary and the exchange rate was floating.
C) if the decrease was permanent and the exchange rate was fixed.
D) if the decrease was permanent and the exchange rate was floating.
E) if the decrease was permanent and the exchange rate was high.
C
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If an external benefit is present, then the
A) marginal private benefit curve lies above the marginal private cost curve. B) marginal social benefit curve lies above the marginal private benefit curve. C) marginal social cost curve lies above the marginal private benefit curve. D) marginal social benefit is equal to the marginal social cost. E) marginal social benefit curve is the same as the marginal private benefit curve.
If education creates positive externalities,
a. private markets provide less than the socially optimal quantity of education b. private markets provide more than the socially optimal quantity of education c. the marginal private benefit curve is higher than the marginal social benefit curve d. the marginal private cost curve is higher than the marginal social cost curve e. the government should impose a depletion tax