A Result of a Positive Externality in the Production of a Good

question 158

Multiple Choice

A result of a positive externality in the production of a good is that

• A) the price system will over-allocate resources to the production of that good or service.
• B) the price system will under-allocate resources to the production of that good or service.
• C) the market supply will be too high.
• D) the market demand will be too high.

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Definitions:

Independent Treasury Bill

Legislation passed in 1840 and later in 1846 establishing a system where the U.S. government managed its own funds independently of private banks, storing money in Treasury buildings.

Economic Crisis

A situation characterized by a significant decline in the economy of a country or globally, leading to a decrease in consumer wealth, business failures, and increased unemployment.

Central Treasury

A central department or facility responsible for managing the government's revenue, money, and financial policies.

Deflationary Measure

Economic policies or actions designed to reduce the overall level of prices within an economy, often to tackle inflation or to stabilize economic conditions.