The Troubled Asset Relief Program (TARP) allowed
A) the Treasury to inject funds into commercial banks in return for stock in the banks.
B) the Fed to provide funds to commercial banks in return for stock.
C) the Treasury to insure bank deposits at major U.S. banks.
D) the Fed to make loans to banks as the lender of last resort.
A
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Ronald Coase is famous for the Coase Theorem, which is based on the premise that there is an economically efficient level of pollution reduction
Many economists believe that the tradable emissions allowance program that has been used to deal with the problem of acid rain has been successful in reducing emissions of sulfur dioxide in an economically efficient manner. Why isn't this program an example of the Coase Theorem?
The dead-weight loss from an excise tax
a. is greater if demand is perfectly inelastic. b. is caused by a shift in consumer preferences when the tax is raised. c. is the lost surplus that results from higher prices and lower output resulting from the tax. d. is of little concern to policy makers since all excise taxes are "sin" taxes. e. is the difference between consumer surplus and producer surplus.