Refer to Figure 10.9. Other things equal, a negative demand shock is best represented as a change in equilibrium from

Which of the following is an example of an external cost?

A) a grove of trees planted in a park in Seattle B) a library built in Philadelphia C) a new, faster computer chip D) an oil spill off the coast of South America E) a student graduating from college

Inflation reduces the return to capital gains _____

a. only on large assets such as houses b. because people have to pay taxes on nominal capital gains c. when tax rates on capital gains are high d. only under hyperinflation