Which of the following is not an effective method of reducing negative externalities?
A)relying on voluntary compliance
B)taxing the output of industries that pollute
C)creating legal environmental standards
D)increasing public spending on cleanup and reduction of pollution

Question

Quizplus · Accepted Answer

Relying on voluntary compliance is not an effective method of reducing negative externalities because there is no guarantee that individuals or firms will comply with regulations without incentives or penalties in place. The other choices (B, C, and D) are all effective methods of reducing negative externalities as they create incentives or penalties to encourage individuals and firms to reduce pollution and other negative externalities.

Which of the Following Is Not an Effective Method of Reducing