Canon of Cost-Benefit Analysis
While allocating expenditures, the government generally faces the problem of choice. There are numerous projects with different costs and benefits. With the scarcity of resources, the government should choose the projects wisely to allocate its funds. The project(s) with minimum cost and maximum benefit are to be chosen by the government. For this purpose, various projects on the basis of their cost and benefits are compared and analysed, and the best ones are chosen.
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