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:

Materially Alter

In contract law, it refers to a change that significantly affects the rights or obligations of the parties involved.

Acceptance

The act of agreeing to the terms of an offer, forming the basis of a contract.

Offer

A proposal presented by one party to another with the intention of entering into a legally binding agreement.

Notification

The act or process of officially informing someone about something.