• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain why it is necessary for the government to apply a cost-benefit approach to the appraisal of major new road schemes in the UK

Extracts from this document...


Explain why it is necessary for the government to apply a cost-benefit approach to the appraisal of major new road schemes in the UK A cost benefit analysis is the identification, measurement and weighing up of the costs and benefits of a project in order to decide whether or not it should go ahead. It is necessary for the government to use this because it is important that they determine whether or not the project will be detrimental to the economy, society or both. If the costs to society are greater than the benefits to society, then society will end up suffering. This is very important to governments, because of the short term populist voting cycle in many modern democracies. ...read more.


The government does not want excessive inflation, because it will affect groups of voters adversely. People on fixed pensions (the majority and therefore a more powerful voting bloc) lose, whereas others in better positions (the minority, a less powerful voting bloc) gain. It also raises taxes though fiscal drag, which will not please either of these groups. It redistributes wealth from lenders to borrowers; in inflation the rate of inflation may be well above the interest rate. Lenders are paying a real negative interest rate to borrowers for the privilege of lending to them. This will disadvantage banks and lending institutions and the rate of interest may well be lowered, which does not benefit prudence or reduce people s propensity to invest in banks. ...read more.


and forcing them to eat it would not be viable because it would be too expensive even if it did lower cancer deaths and improve the health of the nation. If a policy is sustainable it allows our generation to meet our own needs without impairing the ability of future generations to meet theirs. This is important because it is in the interest of the government to have a healthy economy and society in the future and not just in the short term. In conclusion, it is very important for a government to use a cost benefit analysis in order to measure the future ramifications on society and to prevent these ramifications if too extreme or condone them if they are a benefit to society. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Retailing In India - A Government Policy Perspective

    And retailing productivity is a very important factor in determining the economy-wide productivity of a country. For example, retail trade constituted nearly one-fourth of the extra-ordinary productivity jump experienced by the USA towards the end of the last millennium. Productivity is a key factor in retailing also because of the

  2. Investment Appraisal

    = 1,630 x 100 = 5.4% 30,000 On financial grounds by looking at the table below, it can be seen that project 1 is preferred on financial grounds. Method Project 1 Project 2 Payback 1st 2nd ARR 1st 2nd NPV 2nd 1st Rank 4 5 Qualitative factors - how reliable

  1. What do you Consider the Key Elements of "New Classical" Macroeconomics? What are the ...

    on trying to explain the existence of business cycles in the economy. New classical theorists suggested two possible explanations for this phenomenon: i) Equilibrium Business Theory. Decision-makers lack all the information they need to make sufficient economic forecasts. ii) Real Business Theory.

  2. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Opposing the government on this issue could be costly to the institute. This is not to say that the desire for government fund is the only reason the Hudson Institute in anti legalization. The say that most of their money comes from private donations.

  1. Analysis the cost of running the UK economy in the fiscal year 2003/2004, and ...

    The implication is that savings (or deferred consumption) are taxed twice under an income-based system and once under an expenditure-based system. One of the main aim of the Meade Committee's proposals was the removal of distortions and the encouragement of saving, for at the moment we do not have a

  2. Transaction Cost Theory

    There is bounded rationality when there is imperfect ability to process the available information, and/or when the information itself is imperfect (i.e. there is uncertainty), both in relation to present and future events. Opportunism relates to how people will respond to conflicts, given the existence of bounded rationality.

  1. Environmental Analysis Of Landis Lund.

    Over the years we have built up excellent partnerships with our main suppliers and we both benefit from them prototyping their products on our machines. The prototyping allows the suppliers to recreate real life scenarios, in which to evaluate their products.

  2. Should a new runway be built at Leeds-Bradford?

    House prices surrounding the immediate areas around Leeds - Bradford Airport would be also likely to suffer putting the owners at a disadvantage when selling their houses in the future. In conclusion, the following disadvantages would likely occur if a new runway was constructed at Leeds - Bradford Airport. 1.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work