Econ Module 10 Terms

income transfers

Payments to individuals for which no current goods or services are exchanged, such as Social Security, welfare, and unemployment benefits.

shortsightedness effect

The misallocation of resources that results because public-sector action is biased (1) in favor of proposals yielding clearly defined current benefits in exchange for difficult-to-identify future costs and (2) against proposals with clearly identifiable current costs that yield less concrete and less obvious future benefits.

Subsidies

a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.

government transfers

payments that the government makes to individuals without expecting a good or service in return