To Internalize the External Costs from Traffic Congestion,policymakers Could

question 9

Multiple Choice

To internalize the external costs from traffic congestion,policymakers could

• A) reduce the number of drivers' licenses.
• B) require smaller cars to be sold.
• C) establish a congestion tax.
• D) build fewer highways.

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Definitions:

Capital Requirements

The minimum amount of capital a bank or other financial institution must hold as required by its financial regulator.

Derivatives Market

A financial market for derivative securities like futures and options, where assets are based on the value of other underlying financial instruments.

TED Spread

The difference between the interest rates on three-month U.S. Treasury bills and three-month Eurodollars having identical expiration dates, serving as an indicator of credit risk in the general economy.

LIBOR

The London Interbank Offered Rate, once a benchmark interest rate at which major global banks lend to one another.