Why Is Cost-Benefit Analysis Important in Determining the Role of Government

question 31

Multiple Choice

Why is cost-benefit analysis important in determining the role of government in our economy

• A)Cost-benefit analysis helps government identify all goods in which benefits exceed costs.
• B)Cost-benefit analysis identifies the possible gains to society from government provision of a particular good.
• C)Cost-benefit analysis identifies the private good markets from the public good markets.
• D)Cost-benefit analysis identifies market failure.

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Definitions:

European Union

A political and economic union consisting of 27 European countries that have agreed to follow common economic, social, and security policies.

Domestic Currencies

The legal currencies in circulation within a specific country, used for the majority of financial transactions within that country.

GDP

Representing the aggregate value of all goods and services made within a specified period, the Gross Domestic Product provides an overview of a country's economic standing.

Economic Integration

The process by which different countries reduce trade barriers and coordinate their economic policies to facilitate trade and investment flows between them.