The goal of industrial policy should be that
A)industries yielding the largest positive externalities should receive the biggest subsidies.
B)any industry that produces negative externalities should be heavily taxed.
C)any production process that produces negative externalities should be shut down.
D)all industries that produce positive externalities should be equally subsidized.

Question

Quizplus · Accepted Answer

Subsidizing the industries that yield the largest positive externalities will promote economic growth and development while also addressing market failures such as underinvestment in research and development. This approach also ensures that the government is supporting industries with the most potential to generate broad social benefits.

The Goal of Industrial Policy Should Be That