A Carbon Tax Would Be an Efficient Method of Addressing

question 119

Multiple Choice

A carbon tax would be an efficient method of addressing the problem of global warming because

• A) carbon taxes are an external cost.
• B) it forces firms to internalize the external cost of emissions.
• C) it eliminates the positive externalities associated with global warming.
• D) firms are likely to prefer the carbon tax over the cap-and-trade policy.
• E) it is less likely than the cap-and-trade policy to result in rising prices.

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Definitions:

Bank Reconciliation

The act of reconciling the cash account balances recorded in an organization's bookkeeping with the related data found on a bank statement.

Deposits in Transit

Funds that have been received and recorded by a business but not yet processed by the bank.

Service Charges

Fees charged to customers for specific services or as penalties for not meeting certain criteria such as minimum account balance requirements.

Internal Control Procedure

Processes undertaken by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.