One of the following is a fundamental feature of the social...

One of the following is a fundamental feature of the social Benefit-Cost Analysis. Which one? a. It does not include tax impacts b. It does not account for the time value of money c. It does not account for social costs d. It does not involve uncertainty e. It does not account for indirect benefits

Transcript

00:01 The answer for the first is the unemployment rate is 10 percent that means that the private cost of unemployment on one extreme is the substantial loss by those who are experiencing a long period with little or no unemployment compensation.

00:41 So, and other extreme we can consider it as minimum loss of those who are out of work who are out of work and lost net income.

01:07 It is fully replaced by unemployment compensation and the benefits of unemployment are lucrative and are given for a longer period of time for an unemployed individual.

01:27 They can given a longer period of staying unemployed because they are given a small amount of compensation so that they are happy with what they are having.

01:40 So, they are staying unemployed for a longer period because the she or he is well compensated.

01:50 So, that is why we are going for a low amount of compensation and the main reason for low private cost of unemployment is that it is not subject to tax.

02:06 Unemployment compensation is we could not able to create under tax therefore, it is not subject to tax so that in that case we have to give only very few amount.

02:19 Then the second one the statement given is the government has imposed a tariff on the importation of textile.

02:36 So, here we are considering a tariff of tax on the imported goods or services.

02:41 So, which means that the price of foreign products or services will compensate with domestic or local compensate with domestic substitutes, but it may be less cost the so therefore, we will go for the domestic or local product.

03:12 So, in this case the government benefits from the taxes as well as we can give support to the local people...

Question

One of the following is a fundamental feature of the social Benefit-Cost Analysis. Which one? a. It does not include tax impacts b. It does not account for the time value of money c. It does not account for social costs d. It does not involve uncertainty e. It does not account for indirect benefits

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