Which of the Following Policies Address the The Problem Posed

question 10

Multiple Choice

Which of the following policies address the the problem posed by positive externalities?

• A) a subsidy to the agent that generates the positive externality
• B) a tax on the agent that generates the positive externality
• C) limit the activity that generates the positive externality
• D) a subsidy to the agents that benefit from the positive externality

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Definitions:

Automatic Stay

A legal provision that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

Secured Creditors

Creditors who have a legal right to specific assets of a debtor as collateral for the debts owed to them.

Repossession Proceedings

The legal process by which a lender takes back property when the borrower defaults on payments.

Insolvent

A financial state in which an individual or organization cannot meet its debt obligations due to lack of funds.