When the government pays part of my university education, it is
A. internalizing an external cost.
B. using direct regulation to discourage an external cost.
C. using taxes to discourage an external cost.
D. subsidizing an external benefit.
Answer: D
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An increase in government expenditure can ________ potential GDP and an increase in taxes can ________ potential GDP
A) increase; never change B) increase; increase C) decrease; decrease D) never change; never change E) increase; decrease
When a nation exports a good, its ________ surplus decreases, and when it imports a good, its ________ surplus decreases
A) consumer; producer B) consumer; consumer C) producer; producer D) producer; consumer E) total; consumer
What is the relationship between net borrower, net lender, debtor nation, and creditor nation?
What will be an ideal response?
With consumption goods measured on the vertical and capital goods measured on the horizontal axis of a production possibilities curve, for Ethiopia to increase its future economic growth, it must choose a point that is
a. inside the curve b. further away from the origin on the horizontal axis c. further away from the origin on the vertical axis d. outside the curve e. closer to the origin on the horizontal axis