What is public choice theory, and how can it affect government intervention?
What will be an ideal response?
Public choice theory assumes that public officials pursue their own personal goals while in office instead of the goals that are best for the public. If government intervention is motivated by self-interest and not what is best for society, the result may be detrimental. In this case government intervention could cause government failure.
You might also like to view...
One reason the aggregate demand curve is downward sloping is because of the
A) interest rate effect. B) tariff effect. C) welfare effect. D) price effect.
Kevin deposits a certain sum in a bank at an annual compounded rate of interest for two years. Interest in the second year will be calculated on:
A) the principal amount only. B) the amount in the account after one year. C) the sum of the principal amount and the amount in the account after one year. D) the difference in the principal amount and the amount in the account after one year.
In the short run, the following could cause a recessionary gap
What will be an ideal response?
(Last Word) Theft and burglary:
A. can be viewed as attempts to maximize utility, given certain marginal costs and marginal benefits. B. are examples of irrational behavior. C. are applications of the law of increasing opportunity cost. D. are less economically rational than crimes of passion and violence.