Return to the market for cigarettes from the previous question. What per-unit tax could the government levy to eliminate the deadweight loss from the behavioral bias?

An external benefit is a benefit that ________

A) is enjoyed by someone other than the buyer of a good B) always equals external cost C) experiences increasing marginal returns D) is greatest at the equilibrium point

A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate

A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; increases