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:

Non-controlling Interest

A shareholder's equity in a subsidiary that is not attributable to the parent company, representing minority ownership.

Consolidated Net Income

The total earnings of a corporation, after tax, including earnings from subsidiaries, before distributing dividends.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, without adjustment for increases or decreases in market value.

Goodwill

An intangible asset arising when a company acquires another for more than the fair value of its net identifiable assets.