Public Choice Analysis Indicates That Elected Political Officials Will Find

question 119

Multiple Choice

Public choice analysis indicates that elected political officials will find debt financing

• A) unattractive because voters will recognize that excessive debt will lead to the future collapse of the economy.
• B) attractive because countries with a higher debt to GDP ratio generally grow more rapidly.
• C) unattractive because both politicians and voters will recognize that a larger outstanding debt will mean higher future taxes.
• D) attractive because current spending can provide voters with highly visible goods, services, and transfer payments, while borrowing will push the most visible cost of this spending into the future.

---

Definitions:

Pessimistic Time

The maximum possible time that a task or project phase is expected to take, assuming worst-case scenarios.

Optimistic Time

The shortest amount of time in which a task or project phase can realistically be completed, assuming everything proceeds better than is normally expected.

Crash Duration

The minimum time period needed to complete an activity or project phase by allocating the maximum resources.

Crash Cost

The additional costs associated with rushing or compressing a project schedule to complete it in the shortest time possible.