Author Question: The efficient quantity of a public good is provided when the economy's A) total benefit from the ... (Read 107 times)

laurencescou · **on:** Jun 29, 2018

The efficient quantity of a public good is provided when the economy's

A) total benefit from the good equals its total cost.
B) total benefit from the good is less than its total cost.
C) marginal social benefit from the good equals its marginal social cost.
D) marginal social benefit from the good is greater than its marginal social cost.

Question 2

Define official settlements account and U.S. official reserves. Discuss the differences between the two terms.

What will be an ideal response?

tranoy · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

The official settlements account is the record of the change in a country's official reserves. U.S. official reserves are the U.S. government's holdings of foreign currency. If the U.S. official reserves increases, the official settlements account balance is negative. The reason the official settlements account decreases is that holding foreign money is similar to investing abroad insofar as both buying foreign money and buying foreign assets (that is, investing abroad) use (rather than acquire) U.S. dollars.