-Use the Above Table

question 57

Multiple Choice

-Use the above table. What will the tax be when external costs are internalized?

• A) $14
• B) $13
• C) $12.20
• D) $1.80

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Definitions:

Effective Interest Rate

Represents the real cost of borrowing or the real yield on an investment, accounting for compounding periods within a year.

Annual Payments

Regular payments made once per year towards the principal and/or interest of a loan or financial obligation.

Nominal Rate

The interest rate stated on a loan or investment agreement, not accounting for inflation or compounding effects.

Semi-Annual Payments

Payments made twice a year, often used in the context of loan repayments or bond interest payments.