If the revenues from a Pigovian tax are not directed to those who are affected by the externality, the outcome:
A. is efficient and maximizes surplus.
B. is not efficient and does not maximize surplus.
C. is efficient, but does not maximize surplus.
D. is not efficient and maximizes surplus.
A. is efficient and maximizes surplus.
Economics
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The optimal collective decision rule is found where _____
a. decision-making costs are minimized b. the sum of the external and decision-making costs are minimized c. marginal political costs and marginal political benefits are equalized d. external costs are minimized
Economics
The interest rate on loans made by banks in the market in which they lend and borrow reserves from each other for very short periods of time is known as the
a. discount rate b. legal reserve rate c. federal funds rate d. open market rate e. margin rate
Economics