When external benefits exist, which of the following can produce the efficient amount of output?

Assume that a British investor buys a one-year U.S. Treasury bill that pays 6 percent annual interest. Given a yield of 4 percent on a comparable British Treasury bill, the U.S. dollar must depreciate 2 percent against the British pound during the year for interest rate parity to hold

a. True b. False Indicate whether the statement is true or false

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

a. price increases and quantity increases b. price decreases and quantity increases c. price increases and quantity increases d. price decreases and quantity decreases e. no change in price and quantity