When a Tax on Output Is Imposed to Internalize the External

question 196

True/False

When a tax on output is imposed to internalize the external costs of pollution, the supply curve shifts down by the amount of the tax.

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Definitions:

Forward Rate

The agreed-upon rate for a financial transaction that will occur at a future date, often used in foreign exchange and interest rate markets.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value.

Maturity Bond

A bond's maturity is the specific future date when the principal amount of the bond is to be paid back to the bondholder, along with any final interest payments.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.