We would expect which of the following to occur when the central bank pursues expansionary monetary policy?
A) an increase in bond prices and an increase in the interest rate (i)
B) a reduction in bond prices and an increase in i
C) an increase in bond prices and a reduction in i
D) a reduction in bond prices and a reduction in i
E) none of the above
C
Economics
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When the production of a good creates an external cost, in order for taxes to be effective in achieving the efficient allocation of resources, the tax must be set equal to the
A) marginal private cost. B) marginal external cost. C) marginal social cost. D) marginal benefit of polluting.
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Assuming constant returns to scale, the equation, Y = A(t)F(K,N) can be rewritten as
a. Y/N = A(t)ƒ(K/N). b. q = A(t)ƒ(k). c. Y/N = A(t)ƒ(K ? N). d. Both a and b e. Both b and c
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