The best example of a positive externality is:
A. alcoholic beverages.
B. roller coaster rides.
C. education.
D. pollution.
Answer: C
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What will be an ideal response?
Due to diminishing marginal returns, the ultimate source of economic growth in the United States from 1949 to 2010 has been
A) capital. B) labor. C) total factor productivity. D) Capital, labor, and total factor productivity are all subject to diminishing marginal returns, and therefore are all equally responsible for economic growth.
According to new growth theory, as technology becomes more important to growth, so does
A. military spending. B. increasing trade barriers. C. increasing taxes. D. human capital.
Critics of the government's fiscal policies argued that government deficits
A. caused the level of unemployment in the United States to increase during the 1980s. B. were linked to the excess of imports over exports that occurred in the 1980s. C. had directly contributed to a decline in the level of demand in the American economy. D. prevented capital from flowing into the United States.