All Else Constant, an Outbreak of Avian Flu

question 80

Multiple Choice

All else constant, an outbreak of avian flu

• A) is likely to increase GDP because it drives up health-care spending.
• B) is likely to decrease GDP because output is likely to fall.
• C) is unlikely to affect GDP.
• D) is likely to increase government transfer payments.

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Definitions:

Excludable

A characteristic of a good or service that allows owners or producers to prevent its use or consumption by others.

Rival

in the context of goods, refers to a type of good for which one person's use diminishes others' ability to use it.

Club Goods

Goods that are excludable but not rival in consumption

Private Goods

Products or services that are consumed by one individual and cannot be used simultaneously by others.