An advantage of a negative income tax is that there are no disincentives to earning additional income

Which of the following episodes would most likely contain an externality?

A) You cannot afford to buy groceries. B) You decide to grow your own vegetables in your backyard where no one else can see them. C) You decide to grow flowers in your front yard where everyone else can see them. D) You eat all the vegetables you grow yourself.

When the interest rate is ________, ________ investments in physical capital will earn more than the cost of borrowed funds, so planned investment spending is ________

A) high; few; high B) high; few; low C) low; few; high D) low; many; low E) high; many; high