One Reason the Size of the Government Is Large Is

question 106

Multiple Choice

One reason the size of the government is large is because

• A) people's demand for private goods grows faster than their demand for public goods.
• B) politicians do not support spending on things such as education and public health.
• C) voters' incomes grow, thereby causing an increased demand for private goods.
• D) budget maximization by bureaucrats and rational ignorance by voters lead to overproduction.
• E) rational ignorance by politicians who follow the principle of minimum differentiation.

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Definitions:

Guaranteed Residual Value

An assurance to lessees that the asset being leased will have a specified value at the end of the lease term, affecting lease payments and financial planning.

Maintenance Agreement

A contractual agreement where one party agrees to maintain assets owned by another party, often including repairs and replacements.

Financing Profit

The profit generated from the difference between the cost of financing sources (such as loans) and the income generated from their use.

Inventory Cost

The total cost associated with obtaining, storing, and managing inventory, including purchase costs, storage costs, and any other expenses related to maintaining or handling inventory.