Which of the following is the best example of a command-and-control regulation?
a. Effluent taxes on pollutants.
b. Emissions trading.
c. Requiring automobiles to have catalytic converters.
d. Offset programs.
QUESTION 2When the Fed buys U.S. government securities from a member bank, _____.
a. there is a decrease in its assets
b. there is an increase in its assets
c. there is a decrease in its liabilities
d. there is an increase in its liabilities
e. its total assets and liabilities remain unchanged
QUESTION 3Identify the correct statement.
a. During a recession, investment decreases while consumption increases.
b. During a recession, investment increases while consumption decreases.
c. During a recession, investment is constant while consumption increases.
d. Annual variations in investment are larger than annual variations in consumption.
e. Annual variations in investment are smaller than annual variations in consumption.
QUESTION 4Government regulations that set an environmental goal and dictate how the goal will be achieved are called:
a. effluent-offset regulations.
b. incentive-based regulations.
c. Coasian regulations.
d. command-and-control-regulations.
QUESTION 5Banks differ from other types of businesses because banks:
a. earn profits.
b. combine economic resources to produce services.
c. can go out of business.
d. can create money.
e. are regulated by the government.
QUESTION 6Data on annual percentage changes in real GDP, consumption, and investment in the United States shows that fluctuations in investment _____.
a. are noticeably smaller during expansions than during recessions
b. are roughly similar to fluctuations in consumption
c. are roughly similar to fluctuations in GDP
d. are closely followed by economic forecasters because those fluctuations often signal that a recession will occur
e. account for most of the variability in GDP
QUESTION 7An example of the command-and-control approach to environmental policy is:
a. placing a tax on freon to reduce its use and the corresponding CFC emissions (which contribute to the ozone hole).
b. requiring car producers to install new air conditioners that do not use freon.
c. allowing coal producers to buy and sell permits to allow CFC emissions.
d. allowing individuals to sue freon producers if CFC emissions exceed a government-set standard.
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