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A Carbon Tax Would Be an Efficient Method of Addressing

Question 128

Multiple Choice

A carbon tax would be an efficient method of addressing the problem of global warming because


A) carbon taxes are an external cost.
B) it forces firms to internalize the external cost of emissions.
C) it eliminates the positive externalities associated with global warming.
D) firms are likely to prefer the carbon tax over the cap-and-trade policy.
E) it is less likely than the cap-and-trade policy to result in rising prices.

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