The term immizerizing growth applies to the case where:
A) technological progress reduces the number of jobs and puts people out of work.
B) investment increases output but reduces national welfare.
C) trade restrictions push the economy back to its production possibilities frontier.
D) economic growth makes people feel miserable.

Question

Quizplus · Accepted Answer

Immizerizing growth occurs when the benefits of economic growth are outweighed by the negative effects. In this case, investment in production increases output, but the resulting increase in supply drives down prices, leading to decreased revenues and even lower welfare. This situation can arise when a country specializes in a particular export, leading to a decline in the terms of trade, or when government policies distort the market.

The Term Immizerizing Growth Applies to the Case Where