Suppose a firm can charge a relatively low price to try to compete actively with its rivals, or it can charge a relatively high, collusive price. If its strategy is to charge the low price regardless of the other firms' decisions, this low-price is the

Why didn't the surge in the monetary base between 2008-2012 lead to a similar surge in the money supply?

A) The currency-deposit ratio rose significantly, resulting in a much smaller money multiplier. B) The excess reserve-deposit ratio rose significantly, resulting in a much smaller money multiplier. C) The Fed increase the required reserve ratio, resulting in a much smaller money multiplier. D) Nonborrowed reserves declined, offsetting the increase in the monetary base.

You are having a party and one of your guests lights up a cigar without asking. Explain why this creates an externality

What will be an ideal response?