Which of the Following Might Be a Method That the Government

question 47

Multiple Choice

Which of the following might be a method that the government could use to correct a negative externality?

• A) an effluent fee on waste from the production of goods that create negative externalities
• B) government subsidies to producers of goods that create negative externalities
• C) financing additional production of goods that create negative externalities
• D) encouraging overallocation of resources of production of goods that create negative externalities

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Definitions:

RRSP

A Registered Retirement Savings Plan in Canada that allows for tax-deferred savings for retirement.

Compounded Quarterly

The method of calculating interest by adding it to the principal every three months, affecting the total amount of interest earned or paid.

Annuity

A monetary instrument providing a regular series of payments to a person, often utilized in preparing for retirement.

Quarterly Payments

Payments made once every three months, often used in the context of loans or investment returns.