________ Is(are) an Example of Selling Externality Rights

question 135

Multiple Choice

________ is(are) an example of selling externality rights.

• A) Auctioning the right to buy a car each year
• B) Direct regulation of externalities
• C) Having the damaged party avoid the damage
• D) Government imposed taxes and subsidies

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Definitions:

Commitment Fee

A fee charged by a lender to a borrower for an unused credit line or undisbursed loan, serving as compensation for keeping funds available.

Commitment Fee

A fee charged by a lender to a borrower for an agreed loan that has not yet been utilized, ensuring the availability of the loan for a specified period.

Revolving Credit Agreement

A credit facility extended by a lender to a borrower that allows the borrower to draw down or withdraw, repay, and redraw loans advanced to it up to a certain agreed amount.

Speculative Demand

Demand for a good or service based not on its inherent value or utility, but on expectations of future price changes or market conditions.