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46 Cards in this Set
- Front
- Back
Pollution abatement-
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Reduction of the quantity of waste discharged into the environment.
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As pollution dicharge decreases...
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The marginal value of wastedischarge and the marginal cost of pollution abatement increases.
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Two criticisms of the Optimal-Pollution concept:
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- Problems of measurement.
- Problems of rights. |
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Coase theorem-
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The proposition that problems of externalities will be resolved efficiently through private exhange, regardless of the initial assignment of property rights, provided that there are no transaction costs.
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What transaction costs are barriers to voluntary resolution of externalities?
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- Scientific and Technical uncertainties
- Leagal Uncertainties - Inherent Costs of Negotiation. |
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What are the government policies for controlling externalities?
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- Command and Control
- Private Litigation and Tort Law - Emission Charges - Emissions Trading |
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Private Litigation and tort law:
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- Involves crimes of nuisance and trespass.
- Solutions involve Tagging pollutants to determine their source and posted bonds so that funds available to pay victims in the event of an accident. |
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Emmission Charges:
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- Govenment impose a charge of a fixed amount per unit of waste on all emissions of a given kind of waste. In effect, a tax on pollution.
- Should encorage all pollution sources to cut back on their output of waste. - Helps cause even charges on different sources of pollution. |
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Emissions Trading:
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- Buyable permits that allow holders to discharge a specified level of waste.
- For various practical reasons, more widespread than emissions charges. |
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Worlds largest importer and exporter?
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USA
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Absolute advantage-
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The ability of a country to produce a good at a lower cost, in terms of quantity of factor inputs, than the cost at which the good can be produced by its trading partners.
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In trading, what country will have the comparative advantage inproducing a good?
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The country in which the opportunity cost of that good is lower.
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Heckscher-Ohlin Theorem-
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The proposition that countries tend to export goods that make intensive use of the factors of production that the country possesses in relative abundance.
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Trade deficit-
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Amount by which imports exceed exports.
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GATT:
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- General Agreement on Tariffs and Trade.
- Replaced by WTO |
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Protectionism-
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Any policy that is intended to shield domestic industries from import competitiion.
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WTO:
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- World Trade Organization
- Replaced GATT |
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Tariff-
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A tax on imported goods.
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Import quotas-
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A limit on the quantity of a good that can be imported over a given period.
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EU:
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- European Union
- A Key aim of European union has been to eliminate all barriers to trade amont the major European countries, eventually leading to a situation in which trade among these countries is nearly as free as trade among the states of the US. - Worlds largest unified economic zone inmost respects. - Euro currency -25 Countries |
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NAFTA:
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- North American Free Trade Agreement
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AFTA:
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- ASEAN Free Trade Area.
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*Real-
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In economics, a term that refers to data that have been adjusted for the effects of inflation.
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GPD:
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- Gross Domestic Product
- A measure of the value of total output of goods and services produced within a nation's borders during a period of time. |
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*Nominal-
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In economics, a term that refers to data that have not been adjusted for the effects of inflation.
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*Real Output-
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A synonym for real gross domestic product.
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*Total factor productivity-
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A measurement of improvements in technology and organization that allow increases in the output produced by givenquantities of labor and capital.`
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*natural level of real output-
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The trend of real GDP growth over time, also known as potential real output.`
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*Business cycle-
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A pattern of irregular but repeated expansion and contraction of aggregate economic activity.
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*Recession-
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A cyclical economic contraction that lasts six months or more.
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Unemployment rate-
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The percentage of the labor force that is unemployed.
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Employed-
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A term used to refer to a person who is working at least 1 hour a week for pay or at least 15 hours per week as an unpaid worker in a family business.
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Unemployed-
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A term used to refer to a person who is not employed but is actively looking for work.
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Labor force-
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The sum of all individuals who are employed and all individuals who are unemployed.
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Discouraged worker-
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A person who would work if a suitable job were available but has given up looking for such a job.
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Natural rate of unemployment-
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The sum of frictional and structural unemployment; the rate of unemployment that persists when the economy is experiencing neither accelerating nor decelerating inflation.
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Employment population ratio-
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The percentage of the noninstitutional adult population that is employed.
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*Frictional unemployment-
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The portion of unemployment that is accounted for by the short periods of unemployment needed for matching jobs with job seekers.
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*Structural unemployment-
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The portion of unemployment that is accounted for by people who are out of work for long periods because their skills do not match those required for available jobs.
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*Cyclical unemployment-
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The difference between the observed rate of unemployment at a given point in the business cycle and the natural rate of unemployment.
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Inflation-
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A sustained dincrease in the average level of prices of all goods and services.
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Price stability-
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A situation in which the rate of inflation is low enough so that it is not a significant factor in business and individual decision making.
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*Transfer payments-
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Payments to individuals that are not made in return for work they currently perform.
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Indexation-
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A policy of automatically adjusting a value or payment in proportion to changes in the average price level.
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*Nominal interest rate-
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The interest rate expressed in the usual way: in terms of current dollars without adjustment for inflation.
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*Real interest rate-
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The nominal interest rate minus the rate of inflation.
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