Which of the Following Answers Best Explains How the Marketfor

question 81

Multiple Choice

Which of the following answers best explains how the marketfor tradeable allowances in pollution works?

• A)Firms are given a particular dollar subsidy value to clean up pollution, and they can trade these subsidies between
• Themselves if they fall below or surpass the limits.
• B)Firms are taxed a particular percentage rate according to how much they pollute, and they can trade the pollutants to
• Reduce the effective tax rates they pay.
• C)Firms are required to stick to particular production levels, and if they go beyond these production levels, they are
• Charged a percentage of their profits.
• D)Firms are given a particular allowance amount of pollutants and if they fall below or surpass these targets they can trade
• Their available allowances with other firms.(True Answer
• )Correct

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Accounts Receivable Turnover

A measure of how quickly a company collects cash from its customers, calculated as sales divided by the average accounts receivable.

Price-Earnings Ratio

A valuation metric comparing a company's current share price to its per-share earnings, used by investors to evaluate the relative value of a company's shares.

Working Capital

Current assets less current liabilities.