An Example of an Activity That Generates an External Cost

question 404

Multiple Choice

An example of an activity that generates an external cost is

• A) dumping soapsuds into a trout stream.
• B) national defense services.
• C) planting flowers along an interstate highway.
• D) eating an apple.

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Definitions:

Predetermined Period

A predetermined period refers to a specific span of time that has been set in advance for a particular purpose or event.

Income Bonds

Bonds that pay interest only when the issuer has earned sufficient profits.

Interest Expense

Interest expense refers to the cost incurred by an entity for borrowed funds over a period of time.

Semiannually

Semiannually implies an occurrence or calculation that happens twice a year, often used in the context of interest payments or reporting periods.