Suppose a shift of aggregate demand pushes the economy "southwest" away from full employment in the aggregate demand and supply diagram. Monetarists would recommend returning to full employment by

Positive externalities are created when

A) other consumers reduce their demand for coffee and price thereby declines. B) farmers spray pesticide in their fields and it washes into the local river after the first rainstorm. C) your neighbor plants beautiful trees and flowers in her yard. D) you purchase the "Mona Lisa" and lock it in a vault.

Refer to Scenario 17.4. If the flood control system were in place, the firm could insure against a flood for an annual premium of

A) $5,000. B) $10,000. C) $100,000. D) $200,000. E) $1,000,000.