Which of the Following Activities Create a Negative Externality

question 237

Multiple Choice

Which of the following activities create a negative externality?

• A)cleaning up the sidewalk on your block
• B)graduating from college
• C)repainting the house you live in to improve its appearance
• D)keeping a junked car parked on your front lawn

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Definitions:

Interest Tax Shield

A reduction in taxable income resulting from deductible interest expenses, typically from debts.

Tax Rate

The proportion of income or profits on which individuals or corporations pay taxes.

Optimal Capital Structure

The proportional mix of debt and equity financing that minimizes a company's cost of capital and maximizes its value.

Market Price

The market's ongoing price for an asset or service available for sale or purchase.