If firms must pay full liability for accidents plus punitive damages, then
a. the private costs of firms' activities will be equal to the social costs.
b. firms will have an incentive to make efficient choices.
c. social welfare will be higher than if no punitive damages were assessed.
d. firms will undertake less activity than would be socially optimal.
d. firms will undertake less activity than would be socially optimal.
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A decrease in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate
Which of the following is NOT one of the major problems with expanding the EU?
A) Expansion has become a more difficult task because of the unwillingness of the eastern and central European countries to change. B) The programs that target EU expenditures could be stretched thin by the addition of countries with much lower incomes. C) The EU may be faced with an unstable eastern border with huge worker migratory flows if the transition economies fail. D) Most central and eastern European countries have large agricultural sectors and extending subsidies to these countries would entail an enormous flow of funds given the Common Agricultural Policy.