Governments Use Subsidies ________

question 48

Multiple Choice

Governments use subsidies ________.

• A)as a means of increasing government spending
• B)when they want to increase taxes
• C)to achieve an efficient outcome in a market with external costs
• D)to achieve an efficient outcome in a market with external benefits
• E)and emission permits to achieve an efficient outcome in markets with external benefits

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Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the involved parties to be enforceable.

Primary Objective Test

A legal standard used to determine the main purpose of a contract or transaction, often applied in tax law to ascertain the primary reason behind a taxpayer's actions.

Main Purpose Test

In contract law, a test applied by the court to determine the real purpose of a guaranty contract.

Legal Signature

A person's official mark or sign, legally recognized, used to signify agreement or consent on documents.