Which policy instrument is commonly used to correct negative externalities?

CA Foundation · Business Economics · MTP · May 2026
Which policy instrument is commonly used to correct negative externalities?
(A) A. Subsidies
(B) B. Price ceilings
(C) C. Pigouvian taxes
(D) D. Import quotas

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Pigouvian taxes

Topics: Public Finance

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic