If a good is price inelastic, a decrease in price will:

Which of the following summarizes the Fisher Effect?

A. Nominal interest rates will rise with unexpected inflation. B. Nominal interest rates will rise with expected inflation. C. Real interest rates will rise with unexpected inflation. D. Real interest rates will rise with expected inflation.

Assume that air pollution from a copper smelter imposes external costs on people who live near the smelter. If the victims of the pollution could not legally enforce the right of their property not to be damaged, the amount of pollution reduction

A) would be significantly less than if the owners of the smelter were legally liable for damages. B) would be less than the amount at which the marginal benefit of pollution reduction equaled the marginal cost. C) would be too small; the government would have to intervene to bring about an efficient outcome. D) would be the same as if it would be if the owners of the smelter were legally liable.