One Way That Government Can Increase the Production of Goods

question 240

Multiple Choice

One way that government can increase the production of goods that have external benefits is to

• A) tax the activity.
• B) subsidize the activity.
• C) use marketable permits.
• D) Both answers B and C are correct.

Distinguish between criminal and civil law.

Recognize the difference between equitable remedies and remedies at law.

Understand the role and authority of administrative agencies.

Comprehend the hierarchy of laws in the United States and the supremacy of the U.S. Constitution.

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Definitions:

Stock Beta

A measure of a stock's volatility in relation to the overall market; it indicates how much the stock's price is likely to move compared to market fluctuations.

Business Cycle

The natural rise and fall of economic growth that occurs over time, consisting of periods of expansion, peak, contraction, and trough.

Cyclical Industry

An industry whose performance is heavily dependent on the overall economic cycle, experiencing higher demand during economic upturns and lower demand during downturns.

Automobile Industry

A global sector that encompasses the design, manufacturing, marketing, and selling of motor vehicles, one of the world's most important economic sectors.