Public Choice Analysis Indicates That

question 291

Multiple Choice

Public choice analysis indicates that

• A) because government action provides public goods, it always increases the wealth of the citizenry.
• B) unconstrained democratic governments often enact special-interest programs that waste resources and impair the standard of living.
• C) constitutional rules limiting public-sector activity generally lower the economic efficiency of the overall economy.
• D) Politicians and voters are better able to judge the public interest than their own private interest.

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Definitions:

Efficient Markets Hypothesis

The theory that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the overall market through stock picking or market timing.

Efficient Markets Hypothesis

The theory that financial markets fully reflect all available information at any given time, making it impossible to consistently achieve higher returns than the overall market.

Share Price

The current price at which a single share of a company's stock can be bought or sold in the financial markets.

Utility Function

A utility function is an economic model representing a consumer's preference ranking for various bundles of goods or services, quantifying satisfaction levels.