A Leading Environmental Group Recently Published a Report Contending That

question 6

Multiple Choice

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated. The group claims that this means that economic growth will eventually stop, and will even be reversed. How would an economist respond to this report?

• A) An economist would agree with the report, and would point to rising natural resource prices as evidence.
• B) An economist would agree with the report, but wouldn't think it was important because emerging markets are likely to discover additional natural resources.
• C) An economist would disagree with the report, in part because it ignores the mitigating effects of technological change.
• D) An economist would disagree with the report because labour and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down.

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Definitions:

Partnership Assets

Assets owned by a partnership, representing the investment and contributions of the partners.

Net Income

The income a company retains following the deduction of all expenses and taxes from its total revenue.

Interest Allowances

Financial incentives or reductions in interest payments designed to encourage borrowing or to alleviate the burden of interest costs.

Salary Allowances

Fixed amounts paid to employees in addition to their regular salary to cover specific needs or expenses, such as travel or living expenses.