Governments Can Deal with Externalities Through the Use of

question 118

Multiple Choice

Governments can deal with externalities through the use of

• A)subsidies.
• B)taxes.
• C)price controls.
• D)All of the above are correct.

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Definitions:

GDP Price Index

A measure that tracks changes in the prices of goods and services included in the Gross Domestic Product, allowing for inflation-adjusted economic assessments.

Nominal Gross Domestic Product

The measure of a country's overall economic output at current market prices, without adjusting for inflation or deflation.

Real Gross Domestic Product

Measures the value of all final goods and services produced within a country's borders in a given time period, adjusted for inflation, reflecting the actual productivity of an economy.

GDP Price Index

An economic metric that measures the changes in prices of all goods and services included in Gross Domestic Product.