An externality arises when a person engages in an activity that influences the well-being of
a. buyers in the market for that activity and yet neither pays nor receives any compensation for that effect.
b. sellers in the market for that activity and yet neither pays nor receives any compensation for that effect.
c. bystanders in the market for that activity and yet neither pays nor receives any compensation for that effect.
d. Both (a) and (b) are correct.
c
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The crowding-out effect refers to
A) government spending crowding out private spending. B) private saving crowding out government saving. C) government investment crowding out private investment. D) private investment crowding out government saving.
The Solow model predicts that the standard of living in poorer nations will converge on that of richer nations through rapid capital formation that raises output per person
The introduction of technological change to the model ________ change this prediction because technology ________ assumed to be freely available to all countries. A) does, is B) does, is not C) does not, is not D) does not, is