It is difficult to get the necessary information to apply corrective taxes in the real world, thus _____
a. most government reluctantly apply to reduce negative externalities
b. use regulation to reduce negative externalities
c. use moral suasion to reduce negative externalities
d. most governments fail to do anything to reduce negative externalities
b
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One of the factors that contributed to the success German policymakers had using a monetary targeting type policy starting in the mid-1970s and continuing through the next two decades was that
A) they used a rigid target for the money growth rate. B) they implemented policy so their inflation rate goal was met in the short run. C) the money target was flexible to allow the Bundesbank to concentrate on other goals as needed. D) they rarely communicated the intentions of policy to the public in order to keep the public from panicking.
Suppose the following: (1 ) the wage rate falls, (2 ) business taxes decline, (3 ) any change in SRAS is greater than any change in AD. Based on this information, in the short run Real GDP will __________ and the price level will __________
A) rise; rise B) fall; rise C) fall; fall D) rise; fall E) none of the above