If Technological Progress Involves Positive Externalities, Then Private Sector Spending

question 19

Multiple Choice

If technological progress involves positive externalities, then private sector spending on research and development may be:

• A) too high.
• B) wasted.
• C) too low.
• D) less than public sector spending on research and development.

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Definitions:

Taxable Income

The amount of income subject to taxes, calculated by adjusting gross income for deductions, exemptions, and allowances, according to tax laws.

Deferred Income Tax Asset

A balance sheet item that represents taxes paid or carried forward but not yet realized on the income statement.

Net Operating Loss

The deficit that occurs when a business's expenses exceed its revenues, excluding taxes and certain other expenses, over a fiscal period.

Future Profitability

An estimation or outlook on the capacity of a business to generate earnings in future periods, often considered for investments or strategy planning.