Options on individual stocks are not listed on the

When a tax on emissions into the air accurately reflects the cost to all members of society of an additional unit of the emissions, it

A) amounts to no more than a license to pollute. B) encourages firms to reduce emissions as long as the cost of doing so is less than the cost of continuing the emissions. C) gives firms little incentive to search for less-polluting production processes. D) will not prevent large and profitable firms from polluting.

To close a recessionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.

A. reduces; increases; decreases B. raises; decreases; increases C. raises; decreases; decreases D. reduces; increases; increases