Public finance decisions often involve tradeoffs between efficiency and equity from "summary" of Public Finance by Harvey S. Rosen
In the field of public finance, policymakers are often faced with difficult choices when making decisions that affect the distribution of resources within society. One of the key considerations that policymakers must take into account is the tradeoff between efficiency and equity. Efficiency refers to the ability to allocate resources in a way that maximizes overall social welfare, while equity is concerned with ensuring that resources are distributed fairly among the members of society.
When policymakers prioritize efficiency, they focus on maximizing the overall benefits that can be derived from a given set of resources. This often involves making decisions that are based on economic principles, such as ensuring that resources are allocated to their most productive uses. By prioritizing efficiency, policymakers can promote economic growth and improve overall living standards within society.
On the other hand, when policymakers prioritize equity, they are more concerned with ensuring that reso...
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