One Way That Government Can Increase the Production of Goods

question 240

Multiple Choice

One way that government can increase the production of goods that have external benefits is to

• A) tax the activity.
• B) subsidize the activity.
• C) use marketable permits.
• D) Both answers B and C are correct.

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Definitions:

Speculation

The act of forming theories or conjecture without firm evidence.

Cargo System

A traditional system of communal work and social organization, often found in indigenous communities, involving the rotation of community service roles.

Maya Indian Villages

Historical settlements of the Maya civilization, characterized by their advanced architectural, agricultural, and astronomical systems.

Prestige Economy

The creation of a surplus for the express purpose of displaying wealth and giving it away to raise one's status.