An externality is an example of A. a corrective tax. B. a tradable pollution permit. C. a market failure. D. Both a and b are correct.

The correct answer is letter "C": a market failure.

Explanation:

Some economists argue that market failure occurs due to externalities. Market failure refers to the unequal distribution of goods or services. Externalities are benefits or costs that individuals, who are not involved in causing the externality, receive or pay.

The typical example of externality relates it to pollution. Companies causing pollution are strictly fined or imposed limits that restrict the firm's profits. Then, to mitigate the losses, those companies increase their products' prices which eventually affect final consumers.

d,

a. money supply  

have a good day