It May Be Preferable for Government to Intervene to Impose

question 23

Multiple Choice

It may be preferable for government to intervene to impose a public standard rather than let a private,de facto standard be determined through competition because:

• A)Governments are superior to markets in selecting the best technology
• B)A private,de facto standard can take a long time to become established,thereby delaying the adoption of a new technology
• C)Competition is always wasteful
• D)De facto standards tend to be set by US companies

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Definitions:

Present Value

The worth today of a future amount of money or sequence of cash inflows, based on a defined rate of return.

Accumulated Compound Interest

The total amount of interest earned or paid on a principal sum over multiple periods, where each period's interest is added to the principal for future calculations.

Annuity

A series of equal dollar amounts to be paid or received at evenly spaced time intervals (periodically).

Compounded Quarterly

Interest calculation on an investment or loan that is applied four times a year.