PT106.S4.P3.Q15 > Analytics

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Recently, a new school of economics called steady-state economics has seriously challenged neoclassical economics, the reigning school in Western economic decision making. ███

Intro topic · Steady-state economics (new view) vs. neoclassical economics (traditional view)

Neoclassical view · Economy is closed system between producers and consumers

Growth is necessary and unlimited

Steady-state view · Economy is open system dependent on nature

Neoclassical view is wrong; not a closed system. Resources enter system, waste leaves.

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Implications · of steady-state view

Growth is neither necessary nor unlimited. Economy has optimal size in theory. Too much growth is dangerous because it depletes resources and creates waste.

Neoclassical rebuttal · Natural resources can be replaced if depleted

problem · according to steady-state view

Western economies have exceeded optimal size

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Solution · according to steady-state view

Meet human wants without growth, e.g. by using resources more efficiently

Passage Style

Critique or debate

15.

Based on the passage, neoclassical ██████████ █████ ██████ ████ ████ ████████████ ██████████ ███ █████ ██ ███████ ████ ██ ███ █████████ ███████

Question Type

Except (RC)

Stated

This is a Stated EXCEPT question. Four of the answer choices will be points of disagreement between the neoclassical economists and the steady-state economists; the correct answer will be a statement that the neoclassical economists and the steady-state economists do not disagree on.

The environment's ability ██ █████ ███ ████████ ██ ████████

The neoclassical economists and the steady-state economists agree on this point; they just disagree on the solution to this limitation.

77%

Natural resources are ██ ████████ ██████████ ██ ██████████

This is a point of disagreement between the neoclassical economists and the steady-state economists. The steady-state economists think that natural resources are an external restraint, but the neoclassical economists think that natural resources don’t limit economic growth.

11%

The concept of █████████ ████████ ██████ ██ ██████████

This is a point of disagreement between the neoclassical economists and the steady-state economists. The steady-state economists believe that unlimited growth is dangerous, but neoclassical economists think that unlimited growth may be necessary.

Western economies have ████████ █████ ███████ █████

This is a point of disagreement between the neoclassical economists and the steady-state economists. The steady-state economists agree with this statement, but the neoclassical economists don’t think that there is a limit to how big economies should be.

Economies have certain ███████ ██████

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PrepTest 106 - Section 4 - Passage 3 - Question 15

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