Suppose That Policymakers Are Doing Cost-Benefit Analysis on a Proposal

question 166

Multiple Choice

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.Which of the following statements is correct?

• A) The benefits are usually easier to measure than the costs.
• B) Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
• C) Estimating the value of a human life is difficult but necessary in order to evaluate the proposal.
• D) Both a and b are correct.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Debentures

Long-term debt instruments issued by corporations to borrow money, often secured only by the general creditworthiness of the issuer.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized by the lender if the borrower fails to repay the loan.

Secured Bonds

Bonds that are backed by collateral or assets, providing a higher level of security to bondholders.