The government of Southland wants to improve resource allocation in the country.Which of the following actions by the Southland government is most likely to accomplish this?

Question

Quizplus · Accepted Answer

Taxing polluters and subsidizing firms that are creating significant positive externalities is a policy that can incentivize firms to act in a socially responsible way. By internalizing the costs of pollution and rewarding positive externalities, this policy can improve resource allocation in the country. Weakening enforcement of laws and contracts will likely lead to more uncertainty and inefficiencies, while promising to cover every risk of loss for private firms and coercing all firms to innovate and invest can be difficult to execute and can create market distortions.

The Government of Southland Wants to Improve Resource Allocation in the Country.Which