If the Production of a Product or Service Involves External

question 129

Multiple Choice

If the production of a product or service involves external benefits, then the government can improve efficiency in the market by

• A)providing a subsidy to correct for an overallocation of resources.
• B)providing a subsidy to correct for an underallocation of resources.
• C)imposing a corrective tax to correct for an overallocation of resources.
• D)imposing a corrective tax to correct for an underallocation of resources.

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Definitions:

Credibility

The quality of being trusted and believed in, often used in contexts relating to individuals, organizations, and information sources.

Gulf of Tonkin Resolution

A 1964 Congressional resolution that authorized President Johnson to use military force in Vietnam without a formal declaration of war, significantly escalating U.S. involvement in the Vietnam War.

War-Making Powers

The legal and constitutional powers granted to a government or its branches, particularly the executive, to declare and conduct war.

Hawks

Individuals or groups, often within politics, who advocate for an aggressive, military-based foreign policy stance.