A possible externality associated with the process of accumulating new capital is that:
A) a reduction in labor productivity may occur.
B) new production processes may be devised.
C) old capital may be made more productive.
D) the government may need to adopt an industrial policy.

Question

Quizplus · Accepted Answer

New production processes may be devised as a result of accumulating new capital, which can lead to more efficient or innovative ways of producing goods and services, benefiting the economy as a whole. This is considered a positive externality.

A Possible Externality Associated with the Process of Accumulating New