When the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives

These are the options for the question:

A. the policies are futile because where the environment is concerned, it has been repeatedly shown that firms do not respond to economic incentives.

B. the policies are likely to be more successful than policies that cost firms more, but they do not recognize economic incentives.

C. the policies are consistent with economic incentives.

D. pollution is likely to increase.

This is the correct answer:

C. the policies are consistent with economic incentives.

Explanation:

Economic incentives motivate firms and households to act in specific ways. The incentives can be positive or negative depending on the objective.

If the objective is to develop a greener economy, but the government imposes policy that make it more expensive for firms to do so, then, a negative incentive is created, and the objective will probably not be achieved.

The opposite is true if the governmet crafts enviromental policy that make it less expensive for firm to become greener. Firms now have a positive economic incentive and are motivated to follow the guidelines. The objective of a more enviromentally-conscious economy will likely be achieved.