What is the rationale behind a cap-and-trade emission allowance system?
A) It creates a market for externalities.
B) It disciplines polluting firms by specifying the maximum amount of emissions allowed and gives them permits to pollute up to their allowance.
C) It provides firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance.
D) It raises revenue for the government through the sale of permits.
C
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The money multiplier:
A. Is the number of deposit dollars the banking system can create from $1 of excess reserves. B. Decreases as the required reserve ratio decreases. C. Is equal to excess reserves plus required reserves. D. Is equal to the required reserve ratio times transactions deposits.
The marginal product of the fourth gizmo worker hired is
A) 1. B) 3. C) 5. D) 10.