When the Government Chooses a Policy That Aligns Private Incentives

Multiple Choice

When the government chooses a policy that aligns private incentives with social efficiency to solve an externality problem,it

A) provides incentives to private decisionmakers to induce them to solve the externality problem on their own.
B) typically uses command-and-control techniques.
C) uses taxes more often than subsidies.
D) uses subsidies more often than taxes.