Other Things Constant, If Both the Benefits and Costs of a Public-Sector

question 100

Multiple Choice

Other things constant, if both the benefits and costs of a public-sector activity are widespread among voters, the political process will generally result in the

• A) rejection of productive activities and acceptance of unproductive activities.
• B) acceptance of both productive and unproductive activities.
• C) rejection of both productive and unproductive activities.
• D) acceptance of productive activities and rejection of unproductive activities.

---

Definitions:

Cash Equivalents

Short-term, highly liquid investments that can be quickly converted into a known amount of cash, typically with original maturities of three months or less.

Marketable Securities

Financial instruments that can be easily converted into cash, typically with short maturities and high liquidity.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not considered to be cash equivalents.

Net Cash

The amount of cash remaining after all cash inflows and outflows have been accounted for over a specific period.