The US "cash for clunkers" program took roughly 7 million cars off the road. Economists would consider this a colossal failure because:
A)the total number of cars was not reduced
B)7 million cars was not enough to put a dent in global warming
C)those 7 million cars had economic value
D)the program reduced the price of recycled steel

Question

Quizplus · Accepted Answer

Economists would consider the "cash for clunkers" program a failure because the 7 million cars that were taken off the road had economic value, which was destroyed as part of the program. This destruction of economic value outweighed any potential benefits the program may have had. Additionally, the program did not actually reduce the total number of cars on the road, as the program's incentives led consumers to buy more cars to replace the clunkers they traded in.

The US "Cash for Clunkers" Program Took Roughly 7 Million