The Cost of Negative Externalities That Harm the Environment,such as Pollution

question 133

Multiple Choice

The cost of negative externalities that harm the environment,such as pollution costs:

• A) negatively affect the level of GDP by the full amount of the damage.
• B) cause GDP to decline,but by only the cost of cleanup.
• C) cause GDP to underestimate true welfare in the economy.
• D) are not included in GDP.

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Definitions:

Average Operating Assets

The average value of the assets used in day-to-day operations over a certain period, important for determining return on investment and operational efficiency.

Operating Expenses

Costs related to the normal operations of a business, excluding costs of goods sold, such as sales and marketing expenses.

Average Operating Assets

The average value of assets used in the production or operations of a company over a specific period, often used in performance metrics like return on investment.

Sales

Sales pertain to the revenue a company generates through the selling of goods or services to its customers.