Government intervention in an effort to promote allocative efficiency in all industries would likely impose a cost in terms of economic growth. One explanation for this is that
A) some policies to promote allocative efficiency will lead to increased income inequality.
B) firms in perfectly competitive industries that are already allocatively efficient would also be affected by the intervention and become inefficient.
C) correcting externalities inevitably reduces the economy's growth rate.
D) some policies to promote allocative efficiency will lead to decreased income inequality.
E) much of the innovation and productivity growth that leads to economic growth comes from oligopolistic firms.
Correct Answer:
Verified
Q40: Provincial laws that mandate a minimum drinking
Q41: The government prohibits individuals from paying someone
Q42: "Rent- seeking" is a problem of
A) landlords
Q43: If a firm produces a good and
Q44: Adverse selection is said to exist when
Q46: In a free- market economy that is
Q47: A good example of a product that
Q48: Economists use the term "market failure" to
Q49: The diagram below shows the marginal benefit
Q50: Most economists who study "public choice theory"
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents