Legislation That Offers Immediate and Easily Recognized Benefits, at the Expense

question 194

Multiple Choice

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of

• A) a lack of incentive for operational efficiency in the public sector.
• B) market failure.
• C) the special-interest effect.
• D) the shortsightedness effect.

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Definitions:

Qualified Education Expenses

Expenditures for tuition and related educational costs that are necessary for enrollment at an eligible educational institution.

Student Loan Interest

The interest paid on a loan taken out to fund educational expenses, potentially deductible under certain conditions from your taxable income.

Modified AGI

An adjusted gross income figure used for specific tax calculations, modified by adding back certain deductions and exclusions.

Self-employment Tax

The tax self-employed individuals must pay to cover their Social Security and Medicare obligations.