Most Economists Agree That the Best Way to Evaluate Policy

question 64

Multiple Choice

Most economists agree that the best way to evaluate policy is to:

• A) learn if the policy can be determined through a democratic political process, not simply imposed by a bureaucracy.
• B) determine whether the public thought that the government had done all it could do to solve the problem.
• C) know whether the intentions behind the policy were good intentions.
• D) compare the actual benefits of the policy with the actual costs.

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Definitions:

Incurring A Loss

Experiencing a financial deficit where expenses exceed revenues.

Monopolistically Competitive

A market structure characterized by many firms producing similar, but not identical, products and where there are few barriers to entry or exit.

Raises Prices

Refers to the action or factor that causes the price of goods or services to increase.

Profit-Maximizing

A strategy or objective of firms to adjust their production and pricing to achieve the highest possible profit.