QUESTION 2

In countries where government budget is determined by the representatives of various interest groups in the cabinet or in the legislature, fiscal policy may suffer from the "tragedy of the commons" because

a.the budget needs to be approved in the House of Commons.

b.the representatives of interest groups work against the interests of common people.

c.the representatives have an incentive to vote for excess expenditures and tax cuts that benefit their constituencies at the cost of the economy as a whole.

d.the representatives have an incentive to vote for expenditure reductions and tax increases that hurt everyone in the economy.