Legislation That Offers Immediate and Easily Recognized Benefits, at the Expense

question 152

Multiple Choice

Legislation that offers immediate and easily recognized benefits, at the expense of uncertain costs that are in the distant future (such as financing by government debt) , is often enacted even when economic inefficiency results. This can be expected because of

• A) a lack of incentive for operational efficiency in the public sector.
• B) market failure.
• C) the special-interest effect.
• D) the shortsightedness effect.

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Definitions:

Capital Account

A national account that records transactions involving the purchase and sale of assets, including real estate, stocks, bonds, and businesses, between residents and non-residents.

Financial Account

Part of the balance of payments, recording transactions that involve financial assets and liabilities between domestic and foreign entities.

Balance Of Payments

Documentation of every economic exchange between the people of a nation and international counterparts within a designated period.

International Transactions

Economic exchanges between countries, including the transfer of goods, services, capital, and payments across national borders.