To correct for negative externalities, the government
A) should allow the price system do the correction.
B) can impose a tax.
C) can provide a subsidy to consumers.
D) should create a public good.
B
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Using the Keynesian model, the effect of an increase in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the short run
A) a decrease; a decrease B) a decrease; no change C) an increase; an increase D) no change; a decrease
The entry of AT&T and GM into the credit card business is an indication of
A) government's efforts to deregulate the provision of financial services. B) the rising profitability of credit card operations. C) the reduction in costs of credit card operations since 1990. D) the sale of unprofitable operations by Bank of America and Citicorp.