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Externality: Appropriate Remedy

APMICR-W1NHGE

Which of the following is an appropriate government remedy for an externality?

A

An excise tax imposed on the production of flu vaccine.

B

A government subsidy for a paper factory which creates strong odors that prevent homeowners from enjoying time outside.

C

Tax credits for businesses that release dangerous chemicals into the water supply.

D

Government provision of K-12 education that leads to greater labor productivity and overall economic growth.

E

Laws that prevent factories from installing pollution abatement equipment.