In the aggregate expenditures model, if aggregate expenditures (AE) equals $7 trillion and GDP equals $8 trillion, then inventory accumulation equals $1 trillion

The amount of the external marginal cost per ton illustrated in the above figure is

A) $8.00 per ton. B) $12.00 per ton. C) $16.00 per ton. D) zero because no external cost is illustrated.

Banks' asset portfolios include state and local government securities because

A) they help to attract business from these government entities. B) banks consider them helpful in attracting accounts of Federal employees. C) the Federal Reserve requires member banks to buy securities from state and local governments located within their respective Federal Reserve districts. D) there is no default-risk with state and local government securities.