The Optimal Public Policy to Correct for Negative Pecuniary Externalities

question 8

Multiple Choice

The optimal public policy to correct for negative pecuniary externalities is _____.

• A)corrective taxation and compensation
• B)subsidization
• C)corrective taxation without compensation
• D)nothing

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Definitions:

Rejecting

The act of not accepting or dismissing a statistical hypothesis based on the analysis of data.

Level of Significance

The threshold probability used in hypothesis testing to determine whether to reject the null hypothesis.

Probability

A measure of the likelihood of occurrence of an event, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Z Statistic

A statistic that tells us how many standard deviations an element is from the mean. It is used in hypothesis testing.