In 2009,the Federal Government Created a Program Called Cash for Clunkers

question 86

Multiple Choice

In 2009,the federal government created a program called Cash for Clunkers whereby consumers could trade in a less efficient car for a more efficient car and receive a higher value than they would have otherwise.How would an economist understand the decision that consumers faced?

• A) Consumers would compare the marginal benefits to the marginal costs of replacing their cars,and this program made sure that marginal benefits would exceed marginal costs.
• B) Consumers would compare the marginal benefits to the marginal costs of replacing their cars,and this program made sure that marginal costs would exceed marginal benefits.
• C) The Cash for Clunkers program increased the opportunity cost of replacing a car.
• D) The Cash for Clunkers program served as a negative incentive to replacing a fuel-inefficient car.
• E) The Cash for Clunkers program served as an indirect incentive to replacing a fuel-inefficient car.

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Definitions:

Control Features

Mechanisms, policies, or procedures implemented to safeguard assets, ensure accurate and reliable financial data, and promote operational efficiency.

Voucher System

An internal control method in accounting where vouchers are prepared before payments are processed to ensure transactions are authorized and recorded properly.

Check Register

A record of transactions in a checking account, tracking all checks written, deposits made, and current balance.

Selling Company

A business entity that primarily engages in selling goods or services to consumers or other businesses.