Information asymmetry with respect to factors that degrade the operational efficiency is defined as:

CA Foundation · Business Economics · MTP · September 2025
Information asymmetry with respect to factors that degrade the operational efficiency is defined as:
(A) A. Service providers know more about outputs and costs than those who allocate resources
(B) B. Spenders have incentives to use all the resources provided to them
(C) C. Government lacks independent information on performance
(D) D. Detailed ex-ante controls are costly and drive out initiative and variation

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Service providers know more about outputs and costs than those who allocate resources

Topics: Public Finance

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