Which statement best describes most economists' attitudes toward corrective taxes and direct regulation
A)Corrective taxes are often preferred over direct regulation because they typically reduce externalities at a lower cost.
B)Corrective taxes are less preferred than direct regulation because they typically reduce externalities at a higher cost.
C)Corrective taxes are often preferred over direct regulation because they typically reduce externalities at a faster rate.
D)Corrective taxes are less preferred than direct regulation because they typically reduce externalities at a slower rate.

Question

Quizplus · Accepted Answer

Most economists prefer corrective taxes over direct regulation because they create incentives for firms to reduce pollution or other negative externalities, while allowing them to do so at the lowest possible cost. Direct regulation can be less efficient and effective because it may not provide firms with the flexibility to choose the most cost-effective way of reducing externalities.

Which Statement Best Describes Most Economists' Attitudes Toward Corrective Taxes