If the quantity of public goods produced were decided by market forces (supply and demand),
a. there would be more goods provided than would be optimal
b. there would be fewer goods provided than would be optimal
c. the markets would provide the optimal number of goods
d. prices would be optimal, but the optimal quantity of goods would not be produced
e. the firms producing the public goods would earn excess profit
B
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Assuming no change in the nominal exchange rate, how will a lower rate of inflation in the United States relative to Canada affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The impact on the real exchange rate cannot be predicted. C) The real exchange rate will be unaffected. D) The real exchange rate will fall.
Pollution is an example of a
A) negative externality B) positive externality. C) private cost. D) public good.