Which of the following events would most likely be considered a macroeconomic shock?
A) A drought destroys 25% of the strawberry crop in California.
B) Mismanagement results in a federal takeover of the largest credit union in the United States.
C) OPEC unexpectedly announces a 40% reduction in oil production.
D) The Federal Reserve decides to increase the discount rate by 0.25% for the third time in 12 months.
C
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The production of paper creates pollution, an external cost. What happens to the production of paper if the government imposes a tax on paper producers equal to the marginal external cost of the pollution?
What will be an ideal response?
If two variables are unrelated, a scatter diagram of those variables will
A) be a vertical line. B) be a horizontal line. C) be either a vertical or horizontal line. D) have a constant positive slope.