PrepTest 106, Section 4, Question 19
Recently, a new school of economics called steady-state(440 more words not shown)
In the view of steady-state(20 more words not shown)
- Athe total amount(3 more words not shown)
- Bthe index of(3 more words not shown)
- Cthe capacity of(4 more words not shown)
- Dthe problems associated(3 more words not shown)
- Ethe possibility of(2 more words not shown)
Reading the passage
The initially puzzling phrase “noneconomic constraints” makes more sense after the steady-state explanation: the economy depends on a natural world with limits. My first prediction would be a limited supply of a resource, such as trees or minerals. We're looking for something nature can't provide indefinitely, rather than a problem inside the economic model.
Working the answers
- A
Human wants are what the economy aims to satisfy. Their total amount isn't the environmental limit described here.
- B
The index measures environmentally sustainable growth. A measurement of the limit isn't itself the natural capacity that imposes it.
- CCorrect
This picks up the other side of the resource cycle: waste comes out. Nature can absorb only so much of it. Paragraph 2 explicitly links the optimal economic size to nature's limited capacity both to regenerate raw material and to absorb waste. Our prediction focused on the inputs; C identifies the limit on dealing with the outputs.
- D
Problems associated with growth is too broad to identify a natural constraint. That category also includes an economic problem such as income inequity.
- E
Stagnation is an economic outcome, not the outside environmental limit at issue. It's the neoclassical objection to restraining growth.
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