Which of the Following Is an Example of an "Earmark

question 253

Multiple Choice

Which of the following is an example of an "earmark" expenditure?

• A) $2 million for a tennis program in a national highway appropriations bill
• B) $5 million to build more tanks for the military
• C) $1 million to build a bridge in Ohio
• D) $2 million in payments to welfare recipients

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Definitions:

Rational-Ignorance Effect

The decision by individuals to remain uninformed about certain matters because the perceived cost of acquiring the information exceeds the expected benefit.

Shortsightedness Effect

The misallocation of resources that results because public-sector action is biased (1) in favor of proposals yielding clearly defined current benefits in exchange for difficult-to-identify future costs and (2) against proposals with clearly identifiable current costs that yield less concrete and less obvious future benefits.

Private-Sector Provision

The production and supply of goods and services by businesses or entities that are not part of the government or public sector.

Rationally Ignorant

A state where the cost of educating oneself on an issue exceeds the potential benefit that the knowledge would provide.