Liberals generally claim
A) external diseconomies result from excessive government controls.
B) an external benefit does not reflect a market failure while an external cost does.
C) the EPA should be abolished.
D) the market economy provides few incentives to make investments that produce external benefits or lower costs.

Question

Quizplus · Accepted Answer

Liberals generally believe that the market economy does not provide sufficient incentives for individuals and businesses to invest in activities that produce external benefits or lower costs. They therefore support government interventions such as subsidies, taxes, or regulations to address this market failure. Options A and C are not consistent with liberal ideology, and option B is incorrect since both external benefits and external costs reflect market failures.

Liberals Generally Claim