Question

Which one of the following is the similarity between public and private finance?

• A. Principle of benefit
• B. Nature of budget
• C. Expenditure motives
• D. Rationality basis

Answer 1

The correct option is D

Rationality basis

If an individual is tempted by circumstances to act in an irrational way, the government is also subject to such whims with regards to its expenditure. Hence, both the finances are based on rationality.