CEA Policy Evaluation and Analysis 3

Question 1

In policy analysis, 'satisficing' (as described by Herbert Simon) suggests that decision-makers:

Accepted Answer

Choose the first option that meets a minimum acceptability threshold

Answer

Simon's bounded rationality concept holds that decision-makers settle for a satisfactory solution rather than exhaustively searching for the optimal one.

Question 2

Which evaluation criterion asks whether a policy produces its intended outputs efficiently using minimum resources?

Accepted Answer

Efficiency

Answer

Efficiency evaluates whether the policy achieved outputs at the lowest feasible input cost, distinguishing it from effectiveness (did it work) and equity (who benefited).

Question 3

A 'theory of change' in program evaluation serves primarily to:

Accepted Answer

Articulate the causal logic connecting program activities to intended impacts

Answer

A theory of change maps how program inputs and activities are expected to produce outputs, outcomes, and ultimate impacts through specified causal mechanisms.

Question 4

Sensitivity analysis in cost-benefit analysis is used primarily to:

Accepted Answer

Test how conclusions change when key assumptions are varied

Answer

Sensitivity analysis varies uncertain parameters (discount rates, elasticities, benefit values) to determine whether the sign or magnitude of net benefits is robust.

Question 5

The 'multiplier effect' argument for public spending suggests that a $1 increase in government expenditure leads to:

Accepted Answer

A GDP increase greater than $1 due to induced private spending rounds

Answer

The Keynesian multiplier arises because initial government spending becomes income for others who re-spend a portion, amplifying the total demand effect.

(CEA) Certified Economic Analyst Practice Test

(CEA) Certified Economic Analyst Practice Test

CEA Policy Evaluation and Analysis 3