Question 1

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

Accepted Answer

A)  voters to have little incentive to become informed about candidates and political issues. 
B)  voters to spend a great deal of effort becoming informed about candidates and political issues. 
C)  the percent of people who actually turn out to cast a vote on election day to be very high. 
D)  people to be extremely reluctant to "waste" their votes on a third-party candidate. 
A)  voters to have little incentive to become informed about candidates and political issues. 
B)  voters to spend a great deal of effort becoming informed about candidates and political issues. 
C)  the percent of people who actually turn out to cast a vote on election day to be very high. 
D)  people to be extremely reluctant to "waste" their votes on a third-party candidate. A

Question 2

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

Accepted Answer

A)  only when the gains that accrue to the special interest group exceed the costs imposed on other voters. 
B)  when nonspecial-interest voters are unconcerned or uninformed about the issue, and campaign funds are readily available from the special interest group. 
C)  only if the government action is socially efficient. 
D)  only if the government action will reduce the monopoly power of business or labor and, thereby, lead to an improvement in the general welfare of consumers. 
A)  only when the gains that accrue to the special interest group exceed the costs imposed on other voters. 
B)  when nonspecial-interest voters are unconcerned or uninformed about the issue, and campaign funds are readily available from the special interest group. 
C)  only if the government action is socially efficient. 
D)  only if the government action will reduce the monopoly power of business or labor and, thereby, lead to an improvement in the general welfare of consumers. B

Question 3

The rational-ignorance effect refers to the

Accepted Answer

A)  lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. 
B)  fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. 
C)  lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. 
D)  problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues. 
A)  lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. 
B)  fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. 
C)  lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. 
D)  problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues. A

Question 4

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

Accepted Answer

A)  increase their efforts devoted toward market production. 
B)  spend less time attempting to secure redistribution through government. 
C)  spend more time informing themselves about political issues, so they can cast a well-informed vote. 
D)  spend more time rent seeking. 
A)  increase their efforts devoted toward market production. 
B)  spend less time attempting to secure redistribution through government. 
C)  spend more time informing themselves about political issues, so they can cast a well-informed vote. 
D)  spend more time rent seeking.

Question 5

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

Accepted Answer

A)  more than tripled. 
B)  remained constant at 10 percent. 
C)  declined from 30 percent to 20 percent. 
D)  increased from 30 percent to 40 percent. 
A)  more than tripled. 
B)  remained constant at 10 percent. 
C)  declined from 30 percent to 20 percent. 
D)  increased from 30 percent to 40 percent.

Question 6

Direct income transfers account for approximately what percentage of total government spending?

Accepted Answer

A)  10 percent 
B)  30 percent 
C)  50 percent 
D)  60 percent 
A)  10 percent 
B)  30 percent 
C)  50 percent 
D)  60 percent

Question 7

Suppose we coupled the pay of Congress with the federal budget, so that for every billion dollars of deficit spending, a lawmaker's pay would be reduced $1,000. How would this affect fiscal policy?

Accepted Answer

If personal income matters to a majority

Question 8

Which of the following is true?

Accepted Answer

A)  The incentives to engage in rent-seeking activities increase with the ease with which the political process can provide personal gain at the expense of others. 
B)  The amount of resources devoted toward rent seeking generally has no impact on the economic prosperity of a nation. 
C)  Income transfers directed toward the poor constitute about half of all income transfers in the United States. 
D)  All of the above are correct. 
A)  The incentives to engage in rent-seeking activities increase with the ease with which the political process can provide personal gain at the expense of others. 
B)  The amount of resources devoted toward rent seeking generally has no impact on the economic prosperity of a nation. 
C)  Income transfers directed toward the poor constitute about half of all income transfers in the United States. 
D)  All of the above are correct.

Question 9

The term logrolling describes

Accepted Answer

A)  government spending programs financed with user charges. 
B)  the exchange between legislators of their votes on issues. 
C)  the actions of legislators who are willing to trade their political votes for campaign contributions from special interest groups. 
D)  government spending programs that primarily benefit loggers and other forest workers. 
A)  government spending programs financed with user charges. 
B)  the exchange between legislators of their votes on issues. 
C)  the actions of legislators who are willing to trade their political votes for campaign contributions from special interest groups. 
D)  government spending programs that primarily benefit loggers and other forest workers.

Question 10

Which of the following is accurate regarding government expenditures in the United States?

Accepted Answer

A)  The federal government spends considerably more than state and local governments combined. 
B)  The federal government spends more than local governments but less than state governments. 
C)  Local governments spend more than state governments, which in turn, spend more than the federal government. 
D)  Since 1930, total government expenditures as a share of GDP have declined. 
A)  The federal government spends considerably more than state and local governments combined. 
B)  The federal government spends more than local governments but less than state governments. 
C)  Local governments spend more than state governments, which in turn, spend more than the federal government. 
D)  Since 1930, total government expenditures as a share of GDP have declined.

Question 11

Which of the following is true regarding government expenditures in the United States?

Accepted Answer

A)  As a share of GDP, government expenditures were higher in 1950 than 2012. 
B)  Government expenditures were more than 30 percent of GDP in 1930. 
C)  Government expenditures as a share of GDP grew rapidly between 1930 and 1980. 
D)  In 2012, government expenditures at all levels summed to approximately 10 percent of GDP. 
A)  As a share of GDP, government expenditures were higher in 1950 than 2012. 
B)  Government expenditures were more than 30 percent of GDP in 1930. 
C)  Government expenditures as a share of GDP grew rapidly between 1930 and 1980. 
D)  In 2012, government expenditures at all levels summed to approximately 10 percent of GDP.

Question 12

As methods of economic organization, the market and the public sector are similar in which of the following ways?

Accepted Answer

A)  Income and power are distributed equally in both sectors. 
B)  In both sectors, economic activity is undertaken only when it satisfies the criterion for economic efficiency. 
C)  In both sectors, economic exchange is completely voluntary. 
D)  Someone must cover the cost associated with the provision of scarce goods in both sectors. 
A)  Income and power are distributed equally in both sectors. 
B)  In both sectors, economic activity is undertaken only when it satisfies the criterion for economic efficiency. 
C)  In both sectors, economic exchange is completely voluntary. 
D)  Someone must cover the cost associated with the provision of scarce goods in both sectors.

Question 13

Madison is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Madison be most likely to vote for in the upcoming election?

Accepted Answer

A)  Politician A proposes increasing the property tax on personal automobiles and using the money to increase teacher salaries by 10 percent. 
B)  Politician B proposes an across-the-board increase in state income tax rates and using the money to increase the benefits paid to unemployed workers. 
C)  Politician C proposes increasing the property tax on personal automobiles and using the money to increase the benefits paid to unemployed workers. 
D)  Politician D proposes an across-the-board increase in state income tax rates and using the money to improve the highway system. 
A)  Politician A proposes increasing the property tax on personal automobiles and using the money to increase teacher salaries by 10 percent. 
B)  Politician B proposes an across-the-board increase in state income tax rates and using the money to increase the benefits paid to unemployed workers. 
C)  Politician C proposes increasing the property tax on personal automobiles and using the money to increase the benefits paid to unemployed workers. 
D)  Politician D proposes an across-the-board increase in state income tax rates and using the money to improve the highway system.

Question 14

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Accepted Answer

A)  Without the farm subsidies, food shortages would result. 
B)  Subsidies promote the efficient use of agricultural resources. 
C)  Agricultural interests seek a redistribution of income favoring themselves. 
D)  The price support programs reduce food costs, which helps the poor. 
A)  Without the farm subsidies, food shortages would result. 
B)  Subsidies promote the efficient use of agricultural resources. 
C)  Agricultural interests seek a redistribution of income favoring themselves. 
D)  The price support programs reduce food costs, which helps the poor.

Question 15

Transfer payments are

Accepted Answer

A)  payments made to individuals who are employed by the government. 
B)  payments made to individuals who provide goods and services to the government. 
C)  transfers of income from taxpayers to recipients who do not provide current goods and services for the payments. 
D)  omitted from the government expenditure figures. 
A)  payments made to individuals who are employed by the government. 
B)  payments made to individuals who provide goods and services to the government. 
C)  transfers of income from taxpayers to recipients who do not provide current goods and services for the payments. 
D)  omitted from the government expenditure figures.

Question 16

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Accepted Answer

A)  The program provides substantial benefits to a small interest group, and the costs are widespread among voters. 
B)  Both the benefits and costs of the program are widespread among voters. 
C)  The program is financed by a user charge that makes the individuals who benefit from the program pay for its cost. 
D)  The program provides widespread benefits to all voters and imposes a significant cost on a small interest group. 
A)  The program provides substantial benefits to a small interest group, and the costs are widespread among voters. 
B)  Both the benefits and costs of the program are widespread among voters. 
C)  The program is financed by a user charge that makes the individuals who benefit from the program pay for its cost. 
D)  The program provides widespread benefits to all voters and imposes a significant cost on a small interest group.

Question 17

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Accepted Answer

A)  strong because inefficiency is easily detected and leads to the loss of voter support. 
B)  strong because public officials are unconcerned about personal gain. 
C)  weak because government employees are less educated than employees who work in the private sector. 
D)  weak because it is difficult for voters to detect inefficiency and for public officials to gain from actions that would improve the efficiency of government. 
A)  strong because inefficiency is easily detected and leads to the loss of voter support. 
B)  strong because public officials are unconcerned about personal gain. 
C)  weak because government employees are less educated than employees who work in the private sector. 
D)  weak because it is difficult for voters to detect inefficiency and for public officials to gain from actions that would improve the efficiency of government.

Question 18

Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?

Accepted Answer

A)  improvement in the operational efficiency of government agencies 
B)  rapid economic growth 
C)  a reduction in the amount of lobbying 
D)  an increase in rent-seeking activity 
A)  improvement in the operational efficiency of government agencies 
B)  rapid economic growth 
C)  a reduction in the amount of lobbying 
D)  an increase in rent-seeking activity

Question 19

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

Accepted Answer

A)  use coercive force against adults to modify their behavior or force them to pay for a good or service. 
B)  direct resources in a manner that serves the public interest rather than the private interest of individuals. 
C)  produce goods and services that people value. 
D)  escape the constraints imposed by scarcity. 
A)  use coercive force against adults to modify their behavior or force them to pay for a good or service. 
B)  direct resources in a manner that serves the public interest rather than the private interest of individuals. 
C)  produce goods and services that people value. 
D)  escape the constraints imposed by scarcity.

Question 20

Public choice theory indicates competitive forces provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

Accepted Answer

A)  is best for the economic and political situations the country faces. 
B)  will most likely clear the legislative process. 
C)  will increase the welfare of society. 
D)  will increase her chances of winning elections. 
A)  is best for the economic and political situations the country faces. 
B)  will most likely clear the legislative process. 
C)  will increase the welfare of society. 
D)  will increase her chances of winning elections.

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

The rational-ignorance effect refers to the

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

Direct income transfers account for approximately what percentage of total government spending?

Suppose we coupled the pay of Congress with the federal budget, so that for every billion dollars of deficit spending, a lawmaker's pay would be reduced $1,000. How would this affect fiscal policy?

Which of the following is true?

The term logrolling describes

Which of the following is accurate regarding government expenditures in the United States?

Which of the following is true regarding government expenditures in the United States?

As methods of economic organization, the market and the public sector are similar in which of the following ways?

Madison is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Madison be most likely to vote for in the upcoming election?

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Transfer payments are

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

Public choice theory indicates competitive forces provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters

Exam 6: The Economics of Political Action

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

The rational-ignorance effect refers to the

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

Direct income transfers account for approximately what percentage of total government spending?

Suppose we coupled the pay of Congress with the federal budget, so that for every billion dollars of deficit spending, a lawmaker's pay would be reduced $1,000. How would this affect fiscal policy?

Which of the following is true?

The term logrolling describes

Which of the following is accurate regarding government expenditures in the United States?

Which of the following is true regarding government expenditures in the United States?

As methods of economic organization, the market and the public sector are similar in which of the following ways?

Madison is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Madison be most likely to vote for in the upcoming election?

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Transfer payments are

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

Public choice theory indicates competitive forces provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters