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Which of the following statements about the economically efficient level of air pollution is correct?

A) The economically efficient level of pollution occurs where the marginal cost of pollution reduction equals the marginal social benefit of reduction. B) The economically efficient level of pollution occurs where total benefits of pollution reduction are maximized. C) The economically efficient level of pollution is zero. D) The economically efficient level of pollution occurs where all social costs equal all social benefits.

Proponents of fixed exchange rates, who argue that these rates eliminate uncertainty and therefore promote international trade, sometimes fail to recognize that:

A. exchange rates do not matter to businesses, so the uncertainty has no impact. B. fixed exchange rates are more volatile than flexible exchange rates. C. fixed exchange rates may not remain fixed forever. D. international trade is bad for the economy and should not be promoted.