The Use of Pollution Rights Licenses Can Improve Efficiency and Reduce

question 92

Multiple Choice

The use of pollution rights licenses can improve efficiency and reduce pollution since

• A)Pollution rights licenses do not improve efficiency nor reduce pollution
• B)The licenses give environmental groups pollution reducing permits
• C)The cost to purchase these licenses means that social costs are

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Definitions:

Spending Multiplier

A concept in economics that refers to the ratio of a change in output to the initial change in spending that brought it about, indicating the ripple effect of spending through the economy.

Price Level

An index of the average prices of goods and services in an economy over time, indicating inflation or deflation trends.

Aggregate Demand Curve

Represents the total demand for all goods and services in an economy at various price levels, showing an inverse relationship between price level and aggregate demand.

Interest Rate

The cost of borrowing money, usually expressed as a percentage of the total amount loaned.