Private solutions to the problem of externalities are most likely when
A) transactions costs are low and the number of bargaining parties is small.
B) transactions costs are low and the monetary damages to third parties are high.
C) government actively encourages these solutions.
D) transactions costs are low and the number of bargaining parties is large.
A
Economics
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In our modern financial system, money is created
A) only by central banks. B) only by the banking system. C) by central banks and the banking system. D) only by federal governments.
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If a production function is represented as q = LaKb, the long-run average cost curve will be horizontal as long as
A) a + b = 0. B) a + b = 1. C) q > 0. D) L = K.
Economics