Which of the following statements reflects a situation in which there are external costs?
A. Suzanne pays for a professional fireworks show for her family. Her neighbors also enjoy the show.
B. Suzanne dumps her household garbage around the corner of the street.
C. Suzanne invites her neighbors to a party on her birthday.
D. Suzanne paints her house and landscapes her yard. Her newly beautified house and yard help her neighbors to sell their house for more than the asking price.
Answer: B
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"Preannounced, stable policies to achieve a low and constant money supply growth and a balanced federal budget are therefore the best way to lower the inflation rate." This statement best illustrates the:
a. Keynesian theory. b. rational expectations theory. c. incomes policy. d. supply-side theory.
A tax of a specific absolute sum levied on every person in the nation is called a(n)
a. income tax b. proportional tax c. progressive tax d. equitable tax e. poll tax