When the Government Chooses an Externality Policy That Aligns Private

question 193

Multiple Choice

When the government chooses an externality policy that aligns private incentives with social efficiency to solve an externality,what does it do

• A)It provides incentives for private decision makers to solve the externality problem on their own.
• B)It typically uses command-and-control techniques.
• C)It follows a rule that the use of taxes is strictly forbidden.
• D)It follows a rule that subsidies are always the best policy.

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