In the Case of a Technology Spillover, the Government Can

question 54

Multiple Choice

In the case of a technology spillover, the government can encourage firms to internalize a positive externality by

• A)taxing production, which would decrease supply.
• B)taxing production, which would increase supply.
• C)subsidizing production, which would decrease supply.
• D)subsidizing production, which would increase supply.

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Definitions:

Current Liabilities

Obligations or debts that a company must pay within a year from the date of the balance sheet.

Cost Method

An accounting method used to value inventory or investments at their original cost.

Treasury Stock

Refers to the shares that a company has repurchased from the stock market and holds in its own treasury.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.