Econ 240 Final Exam Study guide with all Correct &
100% Verified Answers |Latest Update |Already
Graded A+
Pigouvian taxes are designed to reduce ✔Correct Answer-external costs
With tradable emissions permits, the price of the permit is determined by ✔Correct Answer-the
supply of and demand for permits.
With use of __ to reduce emissions, the marginal benefit of an additional unit of pollution is the
same for all polluters.
a) an emissions tax or a tradable emissions permit
b) an environmental standard
c) an emissions tax
d) a tradable emissions permit ✔Correct Answer-a) an emissions tax or a tradable emissions
permit
An external benefit is a(n): ✔Correct Answer-benefit that individuals or firms confer on others
without receiving compensation.
The __ is the most widely used measure of inflation in the United States. ✔Correct Answer-
consumer price index
The purpose of indexing Social Security payments to the CPI is to:
a) increase corporate profits.
b) justify continued government funding of the Bureau of Labor Statistics.
c) maintain the purchasing power of retirees.
d) avoid the privatization of Social Security. ✔Correct Answer-c) maintain the purchasing power of
retirees
The value added is equal to: ✔Correct Answer-the value of sales minus the value of intermediate
goods used by a company.
Fiscal Year ✔Correct Answer-Runs from Oct. 1 to Sep. 30th.
If the marginal propensity to consume is 0.6 and government transfers decrease by $100 million,
then equilibrium GDP will
decrease by: ✔Correct Answer-$150 million.
Government's efforts to stabilize the business cycle through fiscal policy can destabilize the economy
because of:
a) a negative interaction between fiscal and monetary policy due to the multiplier effect.
b) a tendency of prices to change faster than the interest rate.
c) business cycles that are closely synchronized to the political cycle.
d) lags in the process of drafting a budget appropriate to the circumstances. ✔Correct Answer-d)
lags in the process of drafting a budget appropriate to the circumstances.
100% Verified Answers |Latest Update |Already
Graded A+
Pigouvian taxes are designed to reduce ✔Correct Answer-external costs
With tradable emissions permits, the price of the permit is determined by ✔Correct Answer-the
supply of and demand for permits.
With use of __ to reduce emissions, the marginal benefit of an additional unit of pollution is the
same for all polluters.
a) an emissions tax or a tradable emissions permit
b) an environmental standard
c) an emissions tax
d) a tradable emissions permit ✔Correct Answer-a) an emissions tax or a tradable emissions
permit
An external benefit is a(n): ✔Correct Answer-benefit that individuals or firms confer on others
without receiving compensation.
The __ is the most widely used measure of inflation in the United States. ✔Correct Answer-
consumer price index
The purpose of indexing Social Security payments to the CPI is to:
a) increase corporate profits.
b) justify continued government funding of the Bureau of Labor Statistics.
c) maintain the purchasing power of retirees.
d) avoid the privatization of Social Security. ✔Correct Answer-c) maintain the purchasing power of
retirees
The value added is equal to: ✔Correct Answer-the value of sales minus the value of intermediate
goods used by a company.
Fiscal Year ✔Correct Answer-Runs from Oct. 1 to Sep. 30th.
If the marginal propensity to consume is 0.6 and government transfers decrease by $100 million,
then equilibrium GDP will
decrease by: ✔Correct Answer-$150 million.
Government's efforts to stabilize the business cycle through fiscal policy can destabilize the economy
because of:
a) a negative interaction between fiscal and monetary policy due to the multiplier effect.
b) a tendency of prices to change faster than the interest rate.
c) business cycles that are closely synchronized to the political cycle.
d) lags in the process of drafting a budget appropriate to the circumstances. ✔Correct Answer-d)
lags in the process of drafting a budget appropriate to the circumstances.
