Which of the Following Correctly Describes What a Pigouvian Subsidy

question 123

Multiple Choice

Which of the following correctly describes what a Pigouvian subsidy is?

• A) Subsidies received by the producers are called Pigouvian subsidies.
• B) Pigouvian subsidies are awarded to producers whose goods have external benefits.
• C) Taxes on producers creating negative externalities are called Pigouvian subsidies.
• D) Lower corporate tax rates are also known as Pigouvian subsidies.

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Definitions:

Partnership Profits

Partnership profits refer to the net earnings generated from the operations of a partnership, which are shared among partners according to their partnership agreement.

Ownership Interest

A share or stake in a company or property, indicating the holder's rights to its assets and profits.

Partnership Interest

An ownership share in a partnership that represents the holder's claim on assets and income.

Capital Balance

The amount of equity a person or entity has in an asset after deducting all liabilities associated with that asset.