An Advantage Offered by Pollution Taxes That Is NOT Offered

question 40

Multiple Choice

An advantage offered by pollution taxes that is NOT offered by command-and-control policies is that

• A) under pollution taxes pollution is usually reduced to zero.
• B) a pollution tax decreases the price of the polluting good.
• C) under pollution taxes, the government receives tax revenues that may be used to clean up pollution.
• D) pollution taxes decrease the demand for the good generating the pollution.

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Definitions:

APB No.25

An accounting principle that dealt with stock-based compensation and required companies to record an expense for issued options.

Vesting Period

The period of time an employee must work before gaining full access to their benefits or compensation plans, such as pension plans or stock options.

Stock Options

Financial instruments that give employees the right to buy or sell shares of their company at a predetermined price.

Grant Period

The time frame during which certain rights, such as stock options, are awarded to employees and can be exercised.