One Significant Difficulty with Assessing the Effectiveness of Government Agencies

question 26

Multiple Choice

One significant difficulty with assessing the effectiveness of government agencies is that government often allows them to set their own standards for what constitutes acceptable outcomes. Which of the following is one way in which this can be fixed?

• A) Give initial grants to states where the problems are too big to motivate compliance
• B) Give the federal government sufficient bureaucratic manpower to analyze the data it needs to make good decisions
• C) Question the constitutionality of such agencies' agendas
• D) Ensure evaluations are objective through evidence-based policymaking
• E) Ensure evaluations are subjective through a focus on the biggest problem areas first

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Definitions:

Sunk Cost

Expenses that have already been incurred and cannot be recovered, and should not influence future business decisions.

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company can maintain or grow its operations without external financing.

Capital Cost Allowance

A tax deduction in some jurisdictions that allows businesses to depreciate the cost of tangible and intangible assets over time.

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay to its security holders to finance its assets, weighted by the proportion of equity and debt in the company’s capital structure.