According to Public Choice Theory, Which of the Following Is

question 2

Multiple Choice

According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?

• A) If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government.
• B) If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition.
• C) The additional rewards of a policy to the general population outweigh the additional costs that are imposed on a narrow interest group.
• D) Politicians follow their own self-interest and seek to maximize their reelection chances rather than promoting the best interests of society.

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Definitions:

Book Value

The book value represents the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

EPS

Earnings Per Share, a metric that divides a company's profit by the outstanding shares of its common stock, indicating the company's profitability on a per-share basis.

Debt-to-Total-Assets Ratio

A financial ratio that indicates the proportion of a company’s assets that are financed by debt, used to assess financial leverage and risk.

Capital Structure

The mix of different types of debt and equity that a company uses to finance its overall operations and growth.