The shortsightedness effect suggests that
A) politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period.
B) politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future.
C) legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.
D) voters will tend to weigh future costs and benefits more heavily than current costs and benefits.
B) politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future.
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New Keynesians hypothesize that
A) fluctuations in output are largely caused by supply shocks. B) the relationship between inflation and unemployment is exploitable in the long run. C) the relationship between inflation and unemployment is exploitable in the short run. D) there is no relationship between inflation and unemployment.
A monetary aggregate is a measure of
A) the inflation rate. B) the total economic activity of the country. C) money broader than currency. D) definitive money.