ECON 155 Midterm: ECON 155 Midterm Exam
Document Summary
Sample answers to 10 may 2005 midterm exam. The greater cost-uncertainty of the absolute target can be seen as follows. Over any: short-answer questions, costs of meeting an absolute target are sensitive to growth in gdp; costs of meeting an intensity target are less sensitive to gdp growth. Since gdp growth is uncertain, there is more cost-uncertainty under an absolute target than under an intensity target. An attraction of the intensity target is that it involves less cost-uncertainty. given time interval (e. g. , from 2002 to 2012), business-as-usual emissions would tend increase more, the faster the growth of gdp over that interval. As a result, meeting an absolute emissions target would require larger emissions reductions and be more difficult, the faster the growth of. Because the future growth of gdp is uncertain, the difficulty of meeting an absolute target is also quite uncertain. In contrast, under an intensity target, unexpectedly high growth of.
