If the economy is in a recession, the inflation rate is ________ it would be at potential GDP. Other things equal, if the government implemented an expansionary fiscal policy, the inflation rate would ________

Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The total dollar value damage to society is

a. 400 b. 450 c. 500 d. 550

The theory that private negotiations have the potential to make some people better off without making anyone worse off when negative externalities are present is known as: a. the Negative Externality Theorem. b. the Sexton Theorem

c. the Coase Theorem. d. the Abatement Theorem.