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Tems11 [23]
3 years ago
9

Which of the following is INCORRECT about a corrective tax? Select one: a. The tax is equal to the marginal damage from pollutio

n at the equilibrium quantity. b. The goal of a corrective tax is to restore efficiency. c. Producer surplus and consumer surplus will increase because the market becomes more efficient. d. One of its drawbacks is that it is hard to measure the extra social cost.
Business
1 answer:
eduard3 years ago
4 0

Answer:

The answer is  letter "C": Producer surplus and consumer surplus will increase because the market becomes more efficient.

Explanation:

Named after English economist Arthur C. Pigou (1877-1959), the Pigovian Tax or corrective tax is a fine imposed against taxpayers for being part of activities that generate negative side effects. According to Pigou, these externalities play a negative role in the market to reach equilibrium.

It is true that the corrective tax encourages market efficiency but it doesn't imply the tax will lead to producer or consumer surplus, since those are actually influenced by basic supply and demand laws, making option "C" a false statement.

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A firm has sales of $690, EBIT of $300, depreciation of $40, and fixed assets increased by $265. If the firm's tax rate is 40 pe
icang [17]

Answer:

-$45

Explanation:

Given that,

Sales = $690

EBIT = $300

Depreciation = $40

Tax rate = 40%

Fixed assets increased by $265.

Firm's free cash flow:

= Earnings after tax + Depreciation - Capital Expenditure

= [EBIT × (1 - Tax rate)] + $40 - $265

= [$300 × (1 - 0.40)] + $40 - $265

= $180 + $40 - $265

= -$45

Therefore, the firm's free cash flow -$45.

3 0
3 years ago
Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises
DanielleElmas [232]

Answer:

a. Issuer

The entity that promises to make payments on the bond is the entity that issued the bond and they are therefore known as the Bond Issuer.

1. c. Corporate bonds

When a private company issues bonds, these bonds are known as Corporate Bonds. They often offer the most return of the 3 options as they are the riskiest.

2. b. Walmart

Walmart are the issuers of the bond. The rest are Lead Managers who are often Investment banks who help in the facilitation of Bond Issuance.

3. a. When interest rates increase, the prices of U.S. Treasuries decline.

Bond prices and interest rates have an inverse relationship. This is because of the fixed interest payment that bonds offer which can either be attractive or not to investors depending on market rates. For instance, when interest rates are high, other investment vehicles will offer more returns than bonds and so people will divest from them which will reduce their price.

4. c. Treasury bonds

US Treasury and indeed Government bonds on average are the least riskiest of the options listed as they are backed by the full weight and faith of the central government and all its assets. If all else fails, the Central Government could simply print more money to pay off the bonds.

7 0
3 years ago
HEY IS THIS THING ON
fgiga [73]

Answer:SID THE SCIENCE KID

Explanation:

6 0
3 years ago
Read 2 more answers
Need help with this problem asap!!
dybincka [34]
You can go to history.com


6 0
3 years ago
Drew is a salesperson for a company that manufactures seat covers for pickup trucks. Drew relies on his friend Susan—the owner o
Alecsey [184]

Answer: <em>Centers of influence</em>

Explanation:

From the given case/scenario, we can state that Drew uses a <em>center of influence </em>as source of his lead generation. Centers of influence are referred to as or known as those individuals or organizations that tend to boost the market credibility and access through their referrals or just via simple word-of-mouth or through testimonials.

7 0
3 years ago
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