Governments Often ________ Activities That Generate External ________

question 43

Multiple Choice

Governments often ________ activities that generate external ________.

• A) tax; costs
• B) subsidize; costs
• C) tax; benefits
• D) simultaneously tax and subsidize; costs

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Definitions:

APS

Automatic positioning system; however, in an economic context, it often refers to the Average Propensity to Save, indicating the proportion of income that is saved rather than spent.

Saving

The portion of income not spent on immediate consumption but set aside for future use, typically in bank accounts, investments, or other forms of financial savings.

Disposable Income

The spending and saving financial capacity of households after deductions for income taxes.

MPC

Marginal Propensity to Consume - the proportion of any additional income that is spent on consumption rather than being saved.