If External Economies Exist in the Production of a Good,the

question 40

Multiple Choice

If external economies exist in the production of a good,the government could intervene to

• A) shift the industry supply curve to the left.
• B) tax the industry to reduce production.
• C)shift the industry demand curve to the right.
• D) tax the user of the industry's product.
• E) prohibit production until the external economies are eliminated.

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Definitions:

Accounting Costs

Expenses recognized and recorded in financial statements, including cost of goods sold, operating expenses, and taxes.

Tax-Deferred Savings

Investment accounts that offer tax benefits, deferring taxes on earnings until funds are withdrawn.

Loanable Funds

The market where savers supply funds to borrowers, often facilitated by financial institutions, influencing interest rates through supply and demand.

Interest Rate

The proportion of interest a borrower is charged for borrowing money from a lender.