When the Government Chooses an Externality Policy That Aligns Private

question 148

Multiple Choice

When the government chooses an externality policy that aligns private incentives with social efficiency to solve an externality:

• A)it provides incentives to private decision makers to induce them to solve the externality problem on their own
• B)it typically uses command-and-control techniques
• C)the use of taxes is strictly forbidden
• D)subsidies are always the best policy

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Definitions:

Exporting

The act of selling products or services produced in one country to buyers in other countries.

Global Sourcing

The practice of sourcing goods and services from the global market across geopolitical boundaries, aiming to exploit global efficiencies in the delivery of a product or service.

Intellectual Property Rights

Legal rights granted to individuals or organizations over their creations, ideas, designs, and inventions, allowing them to control and profit from their use.

Foreign Exchange

The process of converting one currency into another currency, an essential aspect of global commerce and finance.