In Some Cases, Tradable Pollution Permits May Be Better Than

question 62

Multiple Choice

In some cases, tradable pollution permits may be better than a corrective tax because

• A)pollution permits allow for a market solution while a corrective tax does not.
• B)pollution permits generate more revenue for the government than a corrective tax.
• C)pollution permits are never preferred over a corrective tax.
• D)the government can set a maximum level of pollution using permits.

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Definitions:

Classical Economics

A school of thought in economics that emphasizes the idea that free markets can regulate themselves through the laws of supply and demand.

Government Intervention

Actions taken by government to influence or regulate economic activity, often to achieve economic or social objectives.

Budget Deficits

The situation where a government's expenditures surpass its revenues within a specified period, leading to a shortfall that requires borrowing.

1930s

refers to the decade known for the Great Depression, a severe worldwide economic downturn that lasted from 1929 to 1939.