In the Presence of a Negative Externality,a Specific Tax Can

question 91

Multiple Choice

In the presence of a negative externality,a specific tax can achieve the social optimum because

• A) output is reduced to zero as a result.
• B) it internalizes the external cost.
• C) it directly charges the producer for polluting.
• D) the price of the good rises by the full amount of the tax.

Understand the treatment of realized gains from the sale of FVTOCI investments.

Comprehend different valuation and reporting methods for investments and their implications on financial statement analysis.

Know the prospective and retrospective handling of changes in ownership interests causing a switch between equity method and fair value accounting.

Understand and apply the equity method of accounting for investments in associates.

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Definitions:

Henry Kissinger

A significant political figure, diplomat, and geopolitical consultant, known for his role as United States Secretary of State and National Security Advisor in the 20th century.

Unconditional Pardon

A complete forgiveness for a crime that removes all legal penalties without any conditions or stipulations attached.

Equal Rights Amendment

A proposed amendment to the U.S. Constitution aimed at guaranteeing equal legal rights for all American citizens regardless of sex, though it has not been ratified.

American Society

A diverse and complex society in the United States characterized by various cultural, ethnic, and religious backgrounds.