What Is One Advantage of Allowing a Market for Pollution

question 172

Multiple Choice

What is one advantage of allowing a market for pollution permits to control the total amount of pollution released in an area

• A)The government knows exactly how much each firm is allowed to pollute.
• B)Government revenue from the sale of permits is greater than revenue from a corrective tax.
• C)The initial allocation of permits to firms does not affect the efficiency of the market.
• D)Firms will work together to eventually eliminate pollution.

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Definitions:

Checking Account

A bank account that allows easy access to funds, typically through checks and electronic debits, for everyday transactions.

Newly Received Loan

Funds borrowed for the first time, typically involving an agreement on repayment terms and interest rates.

Fed

The Federal Reserve System, the central banking system of the United States, which regulates banks, manages the country's money supply, and aims to ensure economic stability.

U.S. Government Securities

Instruments for raising funds issued by the Treasury Department of the United States to support the federal government's expenditures.