If the Objective of Economic Policy Is to Decrease the Amount

Multiple Choice

If the objective of economic policy is to decrease the amount of pollution by an industry in the long run, the

A) most effective policy action would be a subsidy to firms for the reduction of emissions.
B) most effective policy action would be a tax on polluting firms.
C) appropriate course of action for government is to do nothing.
D) appropriate course of action for government is to increase R&D outlays to develop technology to remove the emissions from the environment.