Under a Cap-And-Trade Program, What Would Happen If Governments Reduce

question 248

Multiple Choice

Under a cap-and-trade program, what would happen if governments reduce firms' pollution caps?

• A) The market clearing price of pollution permits will increase.
• B) The market cleaning price of pollution permits will decrease.
• C) The marketing cleaning price of pollution permits will not change.
• D) The marketing clearing price of pollution permits will cease to exist.

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