Using average cost pricing to regulate a natural monopoly creates a deadweight loss

If the government subsidizes the production of a good

A) an efficient outcome for producers occurs. B) overproduction relative to the efficient quantity occurs. C) a deadweight loss is created. D) Both answers B and C are correct.

If there is an increase in taxes on business firms in a small open economy, it causes the current account to ________ and the equilibrium quantity of saving to ________

A) fall; fall B) rise; remain unchanged C) fall; remain unchanged D) rise; fall