Which policy tool can the government use to correct negative externalities?

CA Foundation · Business Economics · MTP · April 2025
Which policy tool can the government use to correct negative externalities?
(A) A. Subsidies
(B) B. Taxes
(C) C. Tariffs
(D) D. None of these

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Taxes

Topics: Public Finance

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