If an Economic Action Generates More Costs Than Benefits, the Action

question 172

Multiple Choice

If an economic action generates more costs than benefits, the action

• A) by definition increases the nation's economic welfare.
• B) should not be undertaken from an efficiency standpoint.
• C) should be subsidized by the government in order to make sure that it is undertaken.
• D) is desirable from a public welfare standpoint even though many individuals will be harmed.

---

Definitions:

Per Capita GDP

The average economic output per person, calculated by dividing the Gross Domestic Product (GDP) of a country by its total population.

GPI

Genuine Progress Indicator, an alternative measure to GDP that takes into account the environmental and social costs of economic activity.

Per Capita Real GDP

A measure of a country's economic output that accounts for its number of people, adjusting for inflation to represent the value of goods and services produced per person.

Expenditures Approach

A method for calculating GDP that sums total spending on goods and services within an economy, including consumption, investment, government spending, and net exports.