An Appropriate Government Policy Toward Negative Externalities Is to

question 133

Multiple Choice

An appropriate government policy toward negative externalities is to

• A)subsidize the activity that creates the negative externality.
• B)impose a tax or fine on the activity that creates the negative externality.
• C)pay money to the party that creates the negative externality.
• D)impose a tax on recipients of the negative externality.

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Definitions:

Transferee

An individual or entity that receives property, rights, or interest from another through a lawful transfer.

Present

The current moment or period of time; also refers to formally introducing or making something known.

Check

A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or the person or entity whose name is written on the check.

Drawer

In financial contexts, refers to the person who writes or issues a cheque or draft instructing the bank to pay a specific amount of money.