Yes. Subsidies are benefits that the government can grant to institutions, households and businesses to promote economic efficiency and reduce market failures. They may be distributed through cash or by cutting tax rates. However, there is controversy about the effectiveness of using subsidies for the economy, often related to the inefficiency of promoting a free market, allocating resources that could be used for investment in productive resources and masking the results of economic efficiency. Another major concern with the use of subsidies is the formation of political alliances of those who receive them and those who provide them, creating political interests because of their use.
Answer:
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Answer:
Portfolio beta = 1.1075
Explanation:
The portfolio beta is a function of the weighted average of the individual stocks betas' that form up the portfolio. To calculate the portfolio beta, we use the following formula,
Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N
Where,
- w represents the weight of each stock in portfolio
Portfolio beta = 0.30 * 0.95 + 0.25 * 1.12 + 0.25 * 1.13 + 0.20 * 1.30
Portfolio beta = 1.1075
Answer:
Moral codes and social sanctions
Explanation:
Externality is when the actions of a producer or consumer have an effect on third parties not involved in production or consumption.
Externality can be positive or negative.
Postive externality is when the benefits of economic activities to third parties exceeds the costs.
Negative externality is when the costs of economic activities to third parties exceeds the benefits.
Smoking and littering the environment with cigeratte butts is an example of an activity that generates negative externality.
Sharon's morals and sense of judgement cautioned her against littering with her cigarette butts because she knows such activity is frowned against by the society. So, in this case she is guided by her moral codes.
This is one of the solutions to externality.
Other solutions include:
Taxation
Integration of different types of businesses through merger or acquisition
Contracts
Charities
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