What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output
B) finding a way to address cross-border pollution
C) limiting the extent to which domestic firms can outsource production
D) prohibiting economic activities that create externalities
A
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By Marks buys a one-year German government bond (called a bund) for $400. He receives principal and interest totaling $436 one year later. During the year the CPI rose from 150 to 162
The nominal interest rate on the bond was ________, and the real interest rate was ________. A) 9%; 1% B) 9%; -1% C) 36%; 24% D) 36%; 12%
Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000 . She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%. Emily's annual explicit cost of capital is
a. $2,000. b. $4,000. c. $12,000. d. $14,000.