When Economists Propose Taxes as a Way to Balance Out

question 53

Multiple Choice

When economists propose taxes as a way to balance out the presence of externalities,they try to propose taxes:

• A)based on the externality itself,rather than the action that creates it.
• B)on the action that creates the externality,rather than the externality itself.
• C)on what is simplest to implement.
• D)on what will likely generate the most revenue.

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