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:

Unemployment Rate

The demographic of the labor force that is without employment but actively hunting for work.

Capacity Utilization

A measure of how fully an economy's productive capacity is used, typically expressed as a percentage of total potential output.

Production Possibilities Frontier

An economic model that depicts the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, typically characterized by low unemployment.