Q&A Hero

Q: Write a short note on the Coase theorem.

Q: Which of the following is true about NIMBY? a) The primary objective of the NIMBY movement is to eradicate unemployment in the United States. b) The NIMBY movement focuses on local environmental concerns, particularly as they involve possible risks to person or property. c) The primary objective of the NIMBY movement is to lobby for greater subsidization for renewable energy. d) The NIMBY movement focuses on eradicating poverty in developing countries.

Q: Most of the costs of environmental protection are borne by __________. a) the government b) private parties c) the EPA d) solid waste disposal board

Q: The EPA administers the ________ for the cleanup of existing toxic waste disposal sites. a) Solid Waste Cleanup Fund b) Superfund c) Resource Conservation and Recovery Act of 1976 d) Toxic Substances Control Act of 1976

Q: Which of the following is true with regard to the EPA enforcement process? a) The EPA does not have the authority to forward cases to the Department of Justice. b) As a rule, the EPA enforcement process does not allow the federal government to seek both civil and criminal convictions of polluters. c) The EPA enforcement process requires the filing of a notice of a complaint and a hearing before an administrative law judge (ALJ). d) Typically, the EPA seeks involuntary compliance.

Q: Which of the following is true with regard to the Environmental Protection Agency (EPA)? a) The EPA typically seeks involuntary compliance. b) The EPA enforcement process does not require the filing of a notice of a complaint and a hearing before an administrative law judge. c) The EPA is responsible for administering the Food Quality Protection Act of 1996. d) The EPA was created by an executive order of President Clinton to control greenhouse gases emissions by the developing countries

Q: Which of the following is true with regard to the Regional Greenhouse Gas Initiative (RGGI)? a) RGGI was formed to deal with the United State's solid waste disposal crisis. b) RGGI failed to generate any funds through auctions. c) In 2006, 35 U.S. states formed the RGGI to address the problem concerning the fast-dwindling capacity of the nations landfills. d) The failure of RGGI to affect environmental goals led states to consider withdrawing from the initiative.

Q: Kyoto mechanisms referred to credits bought by countries to ________. a) help finance projects in developing nations that would encourage the usage of coal and oil b) help reduce the rate of unemployment in developing countries c) help finance projects in developing nations that would reduce greenhouse gases d) help developing nations diversify their businesses

Q: The signatories to the Kyoto Protocol agreed to use a(n) ________ to reduce the cost of achieving their commitments. a) life-expectancy system b) emissions permit trading system c) greenhouse gases reporting system d) command-and-control system

Q: The Kyoto Protocol is associated with ________. a) reducing unemployment globally b) privatization of the renewable energy industry c) global climate change d) the prevention of oil spillage in oceans

Q: The Clean Air Act Amendments of 1990 addressed efficiency through a tradable permits system and the distributive consequences were addressed through a number of special provisions called ________. a) permits b) allowances c) incentives d) credits

Q: The third component of the control of an externality in a tradable permits system ________. a) is allowing parties to respond to incentives by choosing the most efficient means of abatement b) involves providing incentives for abatement by internalizing the cost of the harm done by the pollution. c) involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution. d) is allowing states to decide how best to decrease dangerous air pollution in the most cost effective manner.

Q: The control of an externality in a tradable permits system has three components. The first component ________. a) is allowing parties to respond to incentives by choosing the most efficient means of abatement b) is providing incentives for abatement by internalizing the cost of the harm done by the pollution. c) involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution. d) is allowing states to decide how best to decrease dangerous air pollution in the most cost effective manner.

Q: ____________ cap(s) the total allowed emissions of a particular pollutant and issue permits for that amount. a) Life-expectancy systems b) Command-and-control regulations c) Tradable permits systems d) The Superfund

Q: Cap-and-trade systems are also called ________. a) market systems b) governmental systems c) life-expectancy systems d) tradable permits systems

Q: ________ have become an effective means of achieving environmental goals at the least cost to society. a) Command-and-control regulations b) Incentive-based systems c) Life-expectancy approaches d) Supply-chain approaches

Q: Due to the ________, automobile emissions are controlled through government regulation. a) exorbitant costs associated with private bargaining b) unwillingness of businesses to curb air pollution c) low negative externalities associated with air pollution d) general disagreement on the impacts of automobile emissions on the environment

Q: From the Coasean perspective, social efficiency is a problem only when there are impediments to ________. a) growth b) bargaining c) expansion d) diversification

Q: Which of the following is true of the Coase theorem? a) It pertains to distributive objectives and social justice. b) It addresses the private attainment of social efficiency and the conditions for its attainment. c) It implies that when bargaining between the parties to an externality is possible, social efficiency cannot be achieved. d) It underrates the role of government in assigning entitlements to private parties.

Q: ________ prohibits other parties from infringing the entitlement without the consent of the party holding it. a) The Environmental Protection Agency rule b) The Clean Air Interstate Rule (CAIR) c) A property rule d) A liability rule

Q: Which of the following is a distinctive trait of incentive approaches? a) Incentive approaches impose a cost on pollution-causing activities, leaving it to individual polluters to decide how best to respond. b) Incentive approaches attain social efficiency by requiring polluters to externalize the social costs of pollution externalities. c) Incentive approaches does not take into account the benefits and costs of attaining environmental objectives. d) Incentive approaches centralize pollution-control decisions.

Q: The Coase Theorem pertains to ________. a) distributive objectives and social justice b) energy, forests, and the environment more generally c) ecosystems, climate change, pollution, and habitats d) market imperfections, including externalities and public goods

Q: ________ take(s) into account the benefits and costs of attaining environmental objectives and achieve those objectives by aligning the social and private costs of pollution and its abatement. a) Life-expectancy approach b) Supply-chain approach c) Command-and-control regulations d) Incentive approaches

Q: Social efficiency is attained when ________. a) aggregate well-being is minimal b) aggregate economic inequities are maximal c) aggregate well-being is maximal d) aggregate costs negative externalities are maximal

Q: Although the concept of sustainability is appealing, it is subject to two principal issues, ________ and ________. a) the lack of private initiatives; high budget deficits b) how to increase the current employment rate; the challenges of attracting foreign investments c) how to think about population growth; the difficulty of predicting future technological progress and innovation d) the slow growth of the renewable energy industry; the difficulty in curbing emissions of greenhouse gases in developing countries

Q: The Environmental Protection Agency defines ________ as that which creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations. a) stability b) sustainability c) an ecosystem d) the Superfund

Q: The NIMBY movement focuses on local environmental concerns, particularly as they involve possible risks to person or property.

Q: EPA regulation has largely been command and control, in which uniform rules or standards are ordered and then enforced.

Q: The EPA enforcement process requires the filing of a notice of a complaint and a hearing before an administrative law judge.

Q: The EPA was created by an executive order of President Clinton to control greenhouse gas emissions by the developing countries.

Q: The Regional Greenhouse Gas Initiative (RGGI) was formed to operate a cap-and-trade system for reducing greenhouse gases emissions.

Q: Kyoto mechanisms referred to credits bought by countries to help finance projects in developing countries that would reduce greenhouse gases.

Q: The signatories to the Kyoto Protocol agreed to use an emissions permits trading system to reduce the cost of achieving their commitments.

Q: Political leaders and economists all over the world are of the opinion that the Kyoto Protocol was widely successful.

Q: When the Obama administration took office, its EPA declared that CO2 and other greenhouse gases were pollutants and subject to regulation.

Q: The Kyoto Protocol targets expire in 2014.

Q: With the growing scientific evidence indicating global climate change, the George W. Bush administration made the political and economic choice to support the Kyoto Protocol.

Q: The Kyoto Protocol had strong backing in the U.S. Senate, which in 1997 adopted a resolution in support of the protocol.

Q: In a cap-and-trade system, companies are charged hefty fees for the permits.

Q: An emissions tax is favored by some economists because it is transparent and easy to implement compared to having to develop a market.

Q: An emissions tax is considered superior to a tradable permits system because it is impossible to know the amount of abatement in advance with a permits system.

Q: The first component of the control of an externality in a tradable permits system involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution.

Q: The Coase theorem does not apply to a tradable permits system.

Q: Due to the very high transaction costs, automobile emissions are controlled through private regulations.

Q: A market is the logical extension of a decentralized system in which entitlements are assigned and can be traded.

Q: From the Coasean perspective, social efficiency is a problem only when there are no impediments to bargaining.

Q: The Coase theorem implies that when bargaining between two parties to an externality is possible, social efficiency can be achieved.

Q: The Coase theorem pertains to market imperfections, including externalities and public goods.

Q: Command-and-control regulation does not impose uniform controls and standards on dissimilar sources of pollution.

Q: Aggregate well-being does not take into account the harm from an externality and the social costs of reducing that harm.

Q: Population growth and economic growth are the two most important factors contributing to the increase in greenhouse gas emissions.

Q: Environmental Management and Sustainability True/False Questions:

Q: Write short notes on the Volcker rule.

Q: Three of the dissenters characterized the majority report issued by the Financial Crisis Inquiry Commission (FCIC) as a compilation of all the bad events that took place rather than as an explanation of the critical factors that caused the crisis. What were the essential causes of the crisis according to the dissenters?

Q: List the principal conclusions of the majority of members of The Financial Crisis Inquiry Commission (FCIC).

Q: Write short notes on credit card regulation.

Q: State the purpose behind the establishment of the Federal Reserve System and briefly explain its function.

Q: In the late 1990s the Basel Committee had lowered capital requirements in the ________ agreement, and after the financial crisis the focus in ________ was on raising capital requirements. a) Basel I; Basel II b) Basel II; Basel III c) Basel III; Basel IV d) Basel IV; Basel V

Q: The Basel Committee on Banking Supervision is an organization of 27 nations that ________. a) created the Troubled Asset Relief Program in 2008 b) issued a 633-page report in 2011 blaming the dramatic failures of corporate governance and risk management for the financial crisis c) sets capital requirements for banks d) sets ethical standards for shadow banks

Q: Which of the following is true with regard to the Dodd-Frank Act? a) The Act made suing an agency for fraud easier by allowing investors to bring lawsuits against credit rating agencies that knowingly or recklessly failed to conduct a reasonable investigation of the rated security. b) The Act dissolved the Office of Credit Ratings and relaxed internal controls by the credit rating agencies. c) The Act restructured the ratings system. d) The Act forced banks to separate their commercial banking and investment banking businesses.

Q: Which of the following is true of credit rating agencies? a) The credit rating agencies were prompt in recognizing the riskiness of the mortgage-backed securities that were at the center of the financial crisis. b) The credit rating agencies were widely criticized for failing to appreciate the risks associated with the collateralized debt instruments. c) Credit rating agencies are government-owned companies. d) The ratings issued by the credit rating agencies have always been accurate in their risk assessment.

Q: The structure of Wall Street compensation was criticized on the ground that ________. a) the current cash bonus system discouraged risk-taking in the financial system b) the compensation for bankers and traders on Wall Street included a nominal annual bonus c) the current cash bonus system provided strong incentives for short-term performance but weak incentives for long-term performance d) deferred incentive compensation with a higher base salary multiplied material risk on the bank

Q: The Consumer Financial Protection Bureau (CFPB) has authority over ________. a) auto dealers b) hot dog vendors c) banks with assets under $8 billion d) banks with assets over $10 billion

Q: The Volcker Rule was aimed at ________. a) penalizing customers who defaulted on interest payments b) increasing the regulation of credit card issuers c) reducing speculative investments by banks d) regulating credit rating agencies

Q: Which of the following is true with regard to the Obama administrations $787 billion economic stimulus program? a) Most Americans benefitted from the stimulus as the employment rate reached a record high. b) First-time homebuyers were denied tax credits under the program. c) Income tax rates were not reduced under the program but withholding rates were. d) No tax credit was given under the Making Work Pay program.

Q: Which of the following is true of TARP? a) TARP was created by the Obama administration to stimulate the economy. b) TARP was successful in preventing a collapse of the financial system. c) TARP was authorized with funding up to $350 billion. d) Most of the TARP funds provided to banks were not repaid.

Q: As the severity of the crisis became clearer in 2008, the Bush administration and Congress created the ________, which was authorized with funding up to $700 billion to be used to shore up banks and stimulate the provision of credit to borrowers. a) Making Homes Affordable Program b) Making Work Pay Program c) Affirmative Action Program d) Troubled Asset Relief Program

Q: According to the dissenters, who criticized the majority report issued by the Financial Crisis Inquiry Commission (FCIC), ________ was one of the essential causes of the crisis. a) traditional mortgages b) widespread failures in financial regulation c) breakdown in ethics d) the fall in housing prices

Q: Dissenters criticized the majority report issued by the Financial Crisis Inquiry Commission (FCIC) on the grounds that the majority ________. a) unfairly blamed nontraditional mortgages as the essential cause of the crisis b) failed to identify systematic breakdown in accountability and ethics as one of the essential causes of the crisis c) unfairly blamed the credit bubble for the crisis d) ignored evidence of a crisis in Europe at the same time as the one in the United States

Q: Which of the following is true with regard to the report issued by the Financial Crisis Inquiry Commission (FCIC) in 2011 on the causes of the financial crisis? a) The majority laid much of the blame on the role of Fannie Mae and Freddie Mac. b) The majority held the Community Reinvestment Act (CRA) primarily responsible for the crisis. c) The majority concluded that Wall Street and its securitization of high-risk mortgages did not contribute significantly to the crisis. d) The majority concluded that stronger regulation and more vigilant enforcement could have prevented the crisis.

Q: Which of the following forms a part of the principal conclusions reached by the majority of members of the Financial Crisis Inquiry Commission (FCIC) with regard to the causes of the financial crisis? a) that there was no systematic breakdown in accountability and ethics b) that the financial crisis was unavoidable c) that the contribution of over-the-counter derivatives to the crisis was insignificant d) that the failures of the credit rating agencies were essential cogs in the wheel of financial destruction

Q: The Credit CARD (Card Accountability Responsibility and Disclosure) Act of 2009 was passed to ________. a) increase the regulation of credit card issuers b) increase the dropping interest rates on credit card borrowings c) reduce the notice period for late fees d) enhance the ability of card issuers to use risk-based pricing

Q: After two decades of political activity by banks, the Glass-Steagall Act was repealed by the ________. a) Consumer Protection Act of 2010 b) Securities Exchange Act of 1934 c) Gramm-Leach-Bliley Act of 1999 d) Dodd-Frank Act of 2010

Q: The ________ established the Federal Deposit Insurance Corporation (FDIC) to insure deposits in banks. a) Glass-Steagall Act of 1933 b) Consumer Protection Act of 2010 c) Securities Act of 1933 d) Securities Exchange Act of 1934

Q: The ________ forced banks to separate their commercial banking and investment banking businesses. a) Glass-Steagall Act of 1933 b) Consumer Protection Act of 2010 c) Securities Act of 1933 d) Securities Exchange Act of 1934

Q: The first New Deal legislation enacted was the ________. a) Glass-Steagall Act of 1933 b) Consumer Protection Act of 2010 c) Securities Act of 1933 d) Securities Exchange Act of 1934

Q: The appointment of the members of the board of governors of the Federal Reserve is confirmed by the________. a) president b) Senate c) chairman of the Federal reserve d) secretary of state

Q: The members of the board of governors of the Federal Reserve are appointed by the ________. a) president b) Senate c) secretary of state d) chairman of the Federal Reserve

Q: Which of the following serves as overseer of banks and managed the bailout of banks during the financial crisis? a) the World Bank b) the Federal Reserve Bank of New York c) the International Monetary Fund d) the Citigroup

Q: Which of the following is true with regard to the securitization of mortgage loans? a) The loans used to back the collateralized debt obligations (CDOs) have risks that cannot be diversified. b) In the securitization of mortgages, diversification cannot be achieved by pooling mortgages for house purchases in different parts of the country. c) The bank buying mortgage loans issues new securities referred to as collateralized debt obligations (CDOs). d) In constructing collateralized debt obligations (CDOs), cash flows from the mortgages to the tranches reflect a spiral model.