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A Groves Mechanism Is a Procedure for Setting the Level

Question 53

Multiple Choice

A Groves mechanism is a procedure for setting the level of a public good that:


A) induces everyone to report their preferences correctly.
B) induces everyone to overstate the benefit they receive from a public good.
C) induces everyone to understate the benefit they receive from a public good.
D) only works if the public good in question is free of externalities.

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