The government gives power plants a $10,000 reduction on their annual taxes for each pollution control device installed. The tax reduction is referred to as:

Question

Quizplus · Accepted Answer

The tax reduction given to power plants for installing pollution control devices is a form of government subsidy. Subsidies are financial assistance provided by the government to encourage activities that have positive externalities, such as reducing pollution.

The Government Gives Power Plants a $10,000 Reduction on Their