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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Answer:
Option D (The optimal........capital) would be the right choice.
Explanation:
- The optimal composition of capital would be the one with the lowest average capital structure.
- Such alternatives are meaningless since the optimal capital structure is not reflected by them. Maximizing earnings growth, interest burdens, or equity burdens would not enhance the worth including its shareholder.
Answer:
Explanation:
A forward exchange rate is the quoted price for a unit of foreign currency to be delivered at a specified date in the future.
The government sets a fixed exchange rate that is allowed to fluctuate only slightly (if at all) around the par value.
When American customers import more from Europe than they export to Europe, the euro appreciate relative to the dollar.
The depreciation or appreciation of a currency refers to a decrease or increase, respectively, in the foreign exchange value of a floating currency.
Under a managed floating regime, the government plays a significant role in managing the exchange rate by manipulating the currency's supply and demand.
Currencies under such a regime are nonconvertible currencies.