If the Government Wishes to Correct the Existence of Positive

question 145

Multiple Choice

If the government wishes to correct the existence of positive externality, it could

• A)grant subsidies to consumers to stimulate demand.
• B)impose a tax on the producers to stimulate supply.
• C)impose taxes on consumers to stimulate demand.
• D)grant subsidies to producers to reduce supply.

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Definitions:

Generate Revenue

The process of earning income from operations or activities, typically through the sale of goods or services.

Alternative Future Uses

Potential different applications or functions which an asset can serve in the future.

Research and Development

Activities undertaken by a business or government in order to innovate and introduce new products, processes, or services, or to improve upon existing ones.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.