Economic growth occurs because
A) labor forces grow.
B) capital stocks grow.
C) new inventions raise productivity.
D) All of the above.
D
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Which of the following statements is false?
A. A positive externality is internalized if the person that generated the externality incorporates into his or her own private cost-benefit calculations the external benefits that third parties receive. B. Internalizing externalities is not the same as adjusting for externalities. C. An externality has been completely internalized if the socially optimal output emerges. D. Assigning property rights is one way to internalize externalities.
Macland’s government passed a law that requires businesses to give a year’s notice to any worker they want to fire and then to pay unemployment benefits for 6 months at the fired worker’s full salary. What will be the effect on the unemployment rate?
a. It will decrease as employers hire fewer workers. b. It will decrease as more people are willing to work. c. It will increase as employers hire fewer workers. d. It will have no effect on the unemployment rate.