If the FOMC purchases government bonds priced at $5,000 from a bond dealer who banks at National Bank, and if the reserve requirement is 20 percent, then the required reserves of National Bank:

Specialization and trade can take place only if a country is endowed with more of something compared to other countries

a. True b. False Indicate whether the statement is true or false

Which of the following statements is false?

A. A subsidy can be used to internalize a negative externality; a tax can be used to internalize a positive externality. B. Ronald Coase stressed the reciprocal nature of externalities. C. One way to deal with negative externalities is for government to apply regulations directly to the activity that generates the externalities. D. Simply because taxes and subsidies are sometimes used to adjust for negative and positive externalities, respectively, it does not necessarily follow that the socially optimal level of output will be reached.