Which of the Following Would Happen If the Government Increased

question 48

Multiple Choice

Which of the following would happen if the government increased the quantity of pollution rights to be sold,other things equal?

• A)Pollution would not be affected.
• B)The price of pollution rights would rise, and the amount of pollution would decrease.
• C)The price of pollution rights would fall, and the amount of pollution would decrease.
• D)The price of pollution rights would fall, and the amount of pollution would increase.
• E)The price of pollution rights would rise, and the amount of pollution would increase.

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Definitions:

Par Value

A nominal value assigned to a share of stock in the charter of a corporation, which is the minimum legal capital per share.

Common Share

A unit of equity ownership in a corporation, granting holders voting rights and a share in the profits through dividends.

Noncumulative

A term often used in the context of preferred stock dividends that indicates dividends not paid in one period do not need to be paid in future periods.

Nonparticipating

Refers to an insurance policy, financial instrument, or other contracts that do not entitle the holder to share in the profits or surplus of the issuer.