Economics indicates that government funding of special interest projects and fav

Question

Economics indicates that government funding of special interest projects and favoritism of some business firms relative to others will lead to
a. efficient allocation of resources because the government action will correct the failures of the market.  
   b. the funding of productive projects that will improve the well-being of most citizens.  
   c. economic inefficiency because the funding will be driven by political rather than economic considerations.  
   d. a decline in political contributions and a reduction in the quality of the candidates willing to run for political office.  

Explanation / Answer

c. economic inefficiency because the funding will be driven by political rather than economic considerations.   

Reason

Favorism and other behaviors which encourage choosing firms not on the basis of the merits will only lead to economic inefficiency.

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