List and Briefly Define the Three Methods Government Can Use

question 183

Essay

List and briefly define the three methods government can use to cope with an external cost, such as pollution.

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Definitions:

Net Income

The net income of a company following the deduction of all expenses and taxes from its total revenues.

Dividends

Payments made by a corporation to its shareholders, usually from profits, as a distribution of earnings.

Investment

The allocation of resources, usually financial, with the expectation of generating an income or profit.

Intangible Asset

An asset that lacks physical substance, typically comprising patents, copyrights, trademarks, and goodwill.