Answer the following statements true (T) or false (F)
1. Production subsidies are a way of internalizing external costs among polluting firms.
2. In dealing with market failures, the government always bases its decisions on economic analysis of marginal cost and marginal benefit.
3. An effective antipollution policy from the economic perspective requires that all pollution be eliminated and banned.
4. Because in any period of time and in any region the quantity of pollutants that can be absorbed by nature is fixed, the supply of "pollution rights" in a cap-and-trade system will be perfectly elastic.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
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The equilibrium level of aggregate planned expenditure is found where
A) there is no saving and no dissaving. B) net exports is zero. C) aggregate planned expenditure equals real GDP. D) autonomous expenditure equals equilibrium expenditure. E) the price level is rising at a constant rate.
The third round of quantitative easing, announced in September 2012, was focused on purchases of:
A) short-term Treasury bills B) long-term Treasury notes C) long-term Treasury notes and sales of short-term Treasury bills D) mortgage-backed securities