Altering Incentives So That People Take Account of the External

question 116

Multiple Choice

Altering incentives so that people take account of the external effects of their actions

• A) is called internalizing the externality.
• B) can be done by imposing a corrective tax.
• C) is the role of government in markets with externalities.
• D) all of the above.

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Definitions:

Local Party Organizations

The grassroots units of political parties, operating at the local level to support party candidates and policies within specific communities.

Democratic Party

One of the two major contemporary political parties in the United States, known for its liberal positions on various social and economic issues.

Republican Party

One of the two major contemporary political parties in the United States, known for its conservative positions on economic and social policies.

Economic Issues

Problems or challenges related to the economy, including unemployment, inflation, economic growth, and public debt.