Government can raise economic efficiency through all of the following policies, except:
A. Outlawing various forms of commercial deception
B. Imposing pollution taxes on polluting firms
C. Using tax money to subsidize goods with external benefits
D. Fixing the prices of various resources and products
D. Fixing the prices of various resources and products
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List the various arguments against free trade
What will be an ideal response?
Refer to the graph below, which shows a change in the demand for pounds from D to D'. Under a system of fixed exchange rates, the:
A. Price of a pound will increase to $3
B. Price of a dollar will increase to 3 pounds
C. Shortage equal to ab would be met using international monetary reserves
D. Payment deficit will cause changes in price and income levels, which reestablishes the original exchange rate