Which of the Following Is Not an Example of an Externality

question 211

Multiple Choice

Which of the following is not an example of an externality?

• A) Drunk drivers raise everyone's auto insurance premiums.
• B) The price of lumber increases as lumberjacks' wages increase.
• C) The neighbor's beautiful front yard increases your home value.
• D) Someone drives a car that emits thick black smoke.
• E) People who live near a bakery enjoy the smell of baked bread.

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Definitions:

Self-Sustained Growth

Economic growth that is maintained without external assistance, driven by internal factors such as investment in technology and efficiency improvements.

Dependency

A situation where an entity relies on another for support, resources, or needs, often leading to a subordinate relationship.

International Debts

Financial obligations owed by one country to foreign lenders, which can include governments, corporations, or international financial institutions.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as the percentage increase in real gross domestic product (GDP).