If permits are distributed through an auction,governments can recycle the revenue in the form of tax cuts to offset some losses experienced by firms.

Question

Quizplus · Accepted Answer

This statement is true. When permits are distributed through an auction, the government generates revenue from the sale of permits. This revenue can be recycled in the form of tax cuts, which can help to offset some of the losses experienced by firms as a result of complying with the permit system.

If Permits Are Distributed Through an Auction,governments Can Recycle the Revenue