Which of the Following Statements Is Correct

question 535

Multiple Choice

Which of the following statements is correct?

• A)Government should tax goods with either positive or negative externalities.
• B)Government should tax goods with negative externalities and subsidize goods with positive externalities.
• C)Government should subsidize goods with either positive or negative externalities.
• D)Government should tax goods with positive externalities and subsidize goods with negative externalities.

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Definitions:

Income from Operations

Net earnings generated from a company's normal business operations, excluding revenues and expenses from non-operational activities.

Periodic Inventory System

An inventory system where updates to inventory levels are made on a periodic basis rather than continuously.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Purchases

The total amount of goods and materials acquired by a business for the purpose of resale or production during a specific accounting period.