Suppose a Policy Change Will Generate $180,000 of Benefits for Low-Income

question 36

Multiple Choice

Suppose a policy change will generate $180,000 of benefits for low-income families and $150,000 of costs for high-income and middle-class families. This change can best be described as

• A) inefficient.
• B) Pareto efficient.
• C) potentially efficient.
• D) equitable.

---

Definitions:

Growing Annuity

A sequence of financial transactions increasing at a steady rate over a limited duration.

Required Rate

The minimum acceptable rate of return on an investment, considering its risk.

Cash Flow Growth

refers to the increase in the amount of cash that a company generates over a period, indicating how well a company is generating more cash from its operations.

Growing Annuity

A growing annuity is a series of cash flows that grow at a consistent rate per period over a finite number of periods.