Which of the Following Is NOT an Activity That Generates

question 32

Multiple Choice

Which of the following is NOT an activity that generates an externality?

• A) Bob's Service Station dumps used oil in the river.
• B) Bob renovates a run-down house in the neighborhood.
• C) Bob occasionally drives while drunk.
• D) Bob's Service Station donates a car to charity.

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Definitions:

Retained Earnings

Retained Earnings represent the cumulative amount of net income a company retains, rather than distributing to shareholders as dividends.

Restricted

Assets or funds that are reserved for a specific purpose and cannot be freely used for other expenses or investments.

Stock Split

The division of a company's existing stock into multiple shares to boost the liquidity of the shares, though the market capitalization remains unchanged.

Marketability

The ease with which an asset can be bought or sold in the market without affecting its price.