In the Case of a Technology Spillover, Internalizing a Positive

question 522

Multiple Choice

In the case of a technology spillover, internalizing a positive externality through a government subsidy will cause the industry's supply curve to

• A)shift up by an amount equal to the subsidy.
• B)shift down by an amount less than the subsidy.
• C)shift down by an amount equal to the subsidy.
• D)shift down by an amount greater than the subsidy.

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Definitions:

Nominal Variable

A variable measured in terms of monetary value that has not been adjusted for inflation, reflecting the current price levels.

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of GDP to a country's total supply of money.

Real GDP

An economic metric that quantifies the value of all finished goods and services produced within a country's borders in a specific time period, corrected for changes in price or inflation.

Money Supply

The complete financial resource pool available in an economy at a particular period.