Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2017, President Donald Trump was considering a major increase in federal government spending on infrastructure: building and repairing bridges, highways, rail lines, and subways.

In 2017, President Donald Trump was considering a major increase in federal government spending on infrastructure: building and repairing bridges, highways, rail lines, and subways. An article in the Economist argues that: "Just as economists talk of 'negative externalities' (from, say, pollution), infrastructure can have positive externalities that are not captured by investors but will benefit society." Source: "Are Big Infrastructure Projects Castles in the Air or Bridges to Nowhere?" Economist, January 16, 2017. Explain what positive externalities might exist from infrastructure spending. A. Spending on roads, bridges, and highways will increase the profits of companies building these structures. B. Infrastructure spending will enhance the image of the government to its citizens and potential voters. C. There is likely to be an increase in productivity for any business that uses the infrastructure. D. The article is incorrect: Infrastructure spending does not result in positive externalities, as citizens indirectly pay for the infrastructure through higher taxes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Course In Environmental Economics

Authors: Daniel J Phaneuf, Till Requate

1st Edition

1316866815, 9781316866818

More Books

Students also viewed these Economics questions