Cost-Benefit Analysis

• True/False: If a policy creates winners and losers then it is not a pareto improvement

  True
• What is the Hicks-Kaldor Criterion

  A project should be undertaken if it has positive net present value
• What is another name for the hicks-kaldor criterion

  Potential pareto improvement
• What does it mean for the discount rate to be low?

  Returns are more future-oriented
• What does it mean for the discount rate to be high

  Returns are more present-oriented
• What is the social discount rate

  The rate at which society is willing to trade off present for future consumption
• What tax rate of return is the discount rate for funds from investment

  Before-tax
• What tax rate of return is the discount rate for funds from consumption

  After-tax