​Among the Following Cases,the Opportunity Cost of Crowding Out Is

question 30

Multiple Choice

​Among the following cases,the opportunity cost of crowding out is the smallest when the government spends dollars:

• A)staffing the Internal Revenue Service hotline.
• B)printing stationery for new members of Congress.
• C)placing photographs of the new President in government and diplomatic offices worldwide.
• D)on Social Security benefits.
• E)on new interstate highways.

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Definitions:

Useful Life

The estimated period over which an asset is expected to be used before it is considered no longer useful by the owner.

Loss

The result of a company's expenditures surpassing its revenues, leading to financial detriment.

Fair Market Value

The price at which an asset would change hands between a willing buyer and seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Commercial Substance

A transaction has commercial substance if it significantly changes the economic position or cash flows of the entity.