When a Government Program Is Justified Not on Its Merits

question 5

Multiple Choice

When a government program is justified not on its merits but on the number of jobs it will create,

• A)the program is an efficient use of taxpayer dollars.
• B)it should be approved only if the unemployment rate is low.
• C)taxes should be raised to fund the program.
• D)it is known as the "broken window fallacy."

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Definitions:

Income Taxes

Government-imposed charges on the income earned by individuals and businesses, calculated according to tax laws.

Capital Expenditures

Expenses for acquiring physical assets or making upgrades to existing ones, which are expected to provide benefits over a long period.

Direct Method

A technique used in cost accounting to allocate service department costs directly to production departments without considering service department interactions.

Operating Activities

The day-to-day tasks involved in managing a business which include production, sales, and the purchase of inventory.