Which of the Following Statements About Environmental Standards and Emissions

question 174

Multiple Choice

Which of the following statements about environmental standards and emissions taxes is correct?

• A)An emissions tax is a more efficient way to reduce pollution than an environmental standard, because an emissions tax leads to an equalization of the marginal benefit of pollution from all sources.
• B)An environmental standard is a more efficient way to reduce pollution than an emissions tax, because an environmental standard can be structured to lead to an equalization of the reduction in pollution from all sources.
• C)If an emissions tax and environmental standards lead to the same total reduction in pollution, then they will also lead to the same reduction in pollution by individual polluters.
• D)It is easy to set emissions taxes at the "correct" level, since the relationship between emissions taxes and the reduction in emissions that they induce has been extensively studied and is well known.

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Definitions:

Statement of Cash Flow

A financial report that details the inflows and outflows of cash within a company, highlighting its operating, investing, and financing activities.

Direct Method

An approach in accounting for cash flows that lists major cash receipts and payments during a period, providing a clearer picture of how and where cash is generated and used.

Audit Committee

A key committee of a company's board of directors responsible for oversight of financial reporting, audit processes, and compliance matters.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and government agencies.