A small reduction in a country's growth rate is a concern to policy makers because
A) a small change can have large effects on per capita GDP over time.
B) a reduction usually leads to future reductions until finally the economy stagnates.
C) policy makers focus too much on economic growth and not enough on increasing savings rates.
D) the larger GDP is the better the economic welfare will be in the future.
Question 2
Graphically, the effects of an external cost can be shown as
A) a leftward shift of the market demand curve.
B) a leftward shift of the market supply curve.
C) a downward movement along the market demand curve.
D) a rightward shift of the market supply curve.
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