A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town
The plant will also dump some harmful chemicals into the town's river. From an economic standpoint this dumping of chemicals A) is unimportant since the firm is reducing the unemployment in the region.
B) creates a negative externality.
C) is the production of a public good.
D) creates a positive externality.
B
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Which of these demonstrates a negative real shock causing a negative demand shock?
A. Fear among businesses causes them to lay off workers, who eventually return to work at lower wages. B. Bad news, like rising oil prices, causes investors to make more new investments, seeking greater profit opportunities. C. Bad news, like rising oil prices, causes people to become pessimistic and to cut back on their spending. D. Fear among businesses causes them to lay off workers, who lose their skills and become permanently less productive.
________ and ________ are the largest sources of revenue collected by the federal government
A) Individual income taxes; corporate income taxes B) Individual income taxes; social insurance taxes C) Excise and other taxes; individual income taxes D) Corporate income taxes; excise and other taxes