46 - SECTION I Time-35 minutes 27 Questions Directions:...

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SECTION I Time-35 minutes 27 Questions Directions: Each passage in this section is followed by a group of questions to be answered on the basis of what is stated or implied in the passage. For some of the questions, more than one of the choices could conceivably answer the question. However, you are to choose the best answer; that is, the response that most accurately and completely answers the question, and blacken the corresponding space on your answer sheet. Economists have long defined prosperity in terms of monetary value, gauging a given nation's prosperity solely on the basis of the total monetary value of the goods and services produced annually. (5) However, critics point out that defining prosperity solely as a function of monetary value is questionable since it fails to recognize other kinds of values, such as quality of life or environmental health, that contribute directly to prosperity in a broader sense. (10) For example, as the earth's ozone layer weakens and loses its ability to protect people from ultraviolet radiation, sales of hats, sunglasses, and sunscreens are likely to skyrocket, all adding to the nation's total expenditures. In this way, troubling reductions in (15) environmental health and quality of life may in fact initiate economic activity that, by the economists' measure, bolsters prosperity. It can also happen that communities seeking to increase their prosperity as measured strictly in (20) monetary terms may damage their quality of life and their environment. The situation of one rural community illustrates this point: residents of the community value the local timber industry as a primary source of income, and they vocally protested (25) proposed limitations on timber harvests as a threat to their prosperity. Implicitly adopting the economists' point of view, the residents argued that the harvest limitations would lower their wages or even cause the loss of jobs. (30) But critics of the economists' view argue that this view of the situation overlooks a crucial consideration. Without the harvest limitations, they say, the land on which the community depends would be seriously damaged. Moreover, they point out that the residents (35) themselves cite the abundance of natural beauty as one of the features that make their community a highly desirable place to live. But it is also extremely poor, and the critics point out that the residents could double their incomes by moving only 150 kilometers (40) away. From their decision not to do so, the critics conclude that their location has substantial monetary value to them. The community will thus lose much more-even understood in monetary terms-if the proposed harvest limits are not implemented. (45)
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This note was uploaded on 10/02/2010 for the course ACCT 5457 taught by Professor Polm during the Fall '10 term at Rensselaer Polytechnic Institute.

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46 - SECTION I Time-35 minutes 27 Questions Directions:...

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