Tradable Pollution Permits

question 35

Multiple Choice

Tradable pollution permits

• A) reduce the incentive for technological innovations to further reduce pollution.
• B) set the price of pollution.
• C) determine the demand for pollution rights.
• D) set the quantity of pollution.

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Definitions:

Closed Economy

An economic system that does not interact with other economies in terms of trade, investment, or migration.

Closed Economy

An economic system that does not engage in international trade with outside countries and relies wholly on its own resources.

Loanable Funds

The funds available for borrowing in the financial markets, consisting of savings and sometimes bank loans that are available to be lent to businesses and individuals.

Interest Rate

The rate at which borrowers are charged for accessing assets, specified as a percentage of the original sum borrowed.