Question 1

Which of the following is true?

Accepted Answer

A) To remain in office, a politician must try to enact policies that gain him votes for his reelection and increase the support coming from contributors. 
B) A politician always attempts to pursue policies that are good for society even if they are strongly opposed by many of her constituents or contributors. 
C) Politicians generally place more weight on how their decisions affect future costs and benefits than on how they affect present costs and benefits. 
D) The value of being in office is so low that most political candidates spend very little on campaigns to try to win (or keep) elected office. 
A) To remain in office, a politician must try to enact policies that gain him votes for his reelection and increase the support coming from contributors. 
B) A politician always attempts to pursue policies that are good for society even if they are strongly opposed by many of her constituents or contributors. 
C) Politicians generally place more weight on how their decisions affect future costs and benefits than on how they affect present costs and benefits. 
D) The value of being in office is so low that most political candidates spend very little on campaigns to try to win (or keep) elected office.

Question 2

In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources?

Accepted Answer

A) when the benefits are concentrated and the costs are concentrated 
B) when the benefits are concentrated and the costs widespread 
C) when the benefits are widespread and the costs are concentrated 
D) when the benefits are widespread and the costs are widespread 
A) when the benefits are concentrated and the costs are concentrated 
B) when the benefits are concentrated and the costs widespread 
C) when the benefits are widespread and the costs are concentrated 
D) when the benefits are widespread and the costs are widespread

Question 3

Most income transfer programs in the United States

Accepted Answer

A) are means-tested programs that transfer income to the poor. 
B) allocate income to small businesses and small farmers. 
C) are designed to help those with very little economic and political power. 
D) allocate income to concentrated interest groups, such as the elderly, large farmers, and business interests. 
A) are means-tested programs that transfer income to the poor. 
B) allocate income to small businesses and small farmers. 
C) are designed to help those with very little economic and political power. 
D) allocate income to concentrated interest groups, such as the elderly, large farmers, and business interests.

Question 4

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.

Question 5

Public choice analysis indicates that politicians will find

Accepted Answer

A) budget deficits more attractive than budget surpluses. 
B) budget surpluses more attractive than budget deficits. 
C) budget deficits attractive during an economic boom, but surpluses attractive during a recession. 
D) tax increases more attractive than increases in government spending. 
A) budget deficits more attractive than budget surpluses. 
B) budget surpluses more attractive than budget deficits. 
C) budget deficits attractive during an economic boom, but surpluses attractive during a recession. 
D) tax increases more attractive than increases in government spending.

Question 6

Young John recently took a job with the U.S. Department of Agriculture. His supervisor gave him an assignment and a two-week deadline. He finished the job in three days and turned it in. Now his coworkers are mad at John. Why?

Accepted Answer

Since there is little incentive for inte

Question 7

Combined federal, state, and local government expenditures in the United States were approximately 9 percent of the gross domestic product (GDP) in 1930. How large were government expenditures as a share of GDP in 2012?

Accepted Answer

A) approximately 15 percent 
B) approximately 25 percent 
C) approximately 30 percent 
D) approximately 38 percent 
A) approximately 15 percent 
B) approximately 25 percent 
C) approximately 30 percent 
D) approximately 38 percent

Question 8

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of

Accepted Answer

A) a lack of incentive for operational efficiency in the public sector. 
B) market failure. 
C) the special-interest effect. 
D) the shortsightedness effect. 
A) a lack of incentive for operational efficiency in the public sector. 
B) market failure. 
C) the special-interest effect. 
D) the shortsightedness effect.

Question 9

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.

Question 10

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

Accepted Answer

A) The people who benefit from a government program pay the costs of the program roughly in proportion to the benefits that each receives. 
B) The benefits are highly concentrated, and the costs are widespread among voters. 
C) The costs are highly concentrated, and the benefits are widespread among voters. 
D) The benefits accrue primarily in the future, while the costs are more visible during the current period. 
A) The people who benefit from a government program pay the costs of the program roughly in proportion to the benefits that each receives. 
B) The benefits are highly concentrated, and the costs are widespread among voters. 
C) The costs are highly concentrated, and the benefits are widespread among voters. 
D) The benefits accrue primarily in the future, while the costs are more visible during the current period.

Question 11

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

Accepted Answer

A) weak incentives for operational efficiency 
B) rent-seeking 
C) the shortsightedness effect 
D) externalities 
A) weak incentives for operational efficiency 
B) rent-seeking 
C) the shortsightedness effect 
D) externalities

Question 12

Which of the following explains why managers of government agencies have little incentive to achieve operational efficiency?

Accepted Answer

A) Public-sector managers need not fear bankruptcy when operational efficiency is not achieved. 
B) Public-sector managers seldom receive personal benefits if they find ways to improve the efficiency of their operations. 
C) Public-sector agencies typically do not face competition. 
D) All of the above explain why government agencies have little incentive to be efficient. 
A) Public-sector managers need not fear bankruptcy when operational efficiency is not achieved. 
B) Public-sector managers seldom receive personal benefits if they find ways to improve the efficiency of their operations. 
C) Public-sector agencies typically do not face competition. 
D) All of the above explain why government agencies have little incentive to be efficient.

Question 13

Public choice theory assumes each voter will tend to support the political candidate who offers

Accepted Answer

A) programs with the largest benefits to society. 
B) the highest potential for being a good leader in times of war. 
C) programs that create the most equal distribution of income. 
D) to provide the voter with the most personal benefits at the least personal cost. 
A) programs with the largest benefits to society. 
B) the highest potential for being a good leader in times of war. 
C) programs that create the most equal distribution of income. 
D) to provide the voter with the most personal benefits at the least personal cost.

Question 14

According to the shortsightedness effect, politicians tend to favor projects with

Accepted Answer

A) short-run benefits and short-run costs. 
B) short-run benefits and long-run costs. 
C) long-run benefits and short-run costs. 
D) long-run benefits and long-run costs. 
A) short-run benefits and short-run costs. 
B) short-run benefits and long-run costs. 
C) long-run benefits and short-run costs. 
D) long-run benefits and long-run costs.

Question 15

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 16

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 17

The rational-ignorance effect is a result of

Accepted Answer

A) externalities that lead to an excess supply of information. 
B) the limited incentive of the news media to cover political campaigns. 
C) the expectation of individual voters that their vote will not be decisive. 
D) the lack of a college education on the part of most voters in the United States. 
A) externalities that lead to an excess supply of information. 
B) the limited incentive of the news media to cover political campaigns. 
C) the expectation of individual voters that their vote will not be decisive. 
D) the lack of a college education on the part of most voters in the United States.

Question 18

Which of the following factors weakens the case for government provision of goods and services relative to private-sector provision?

Accepted Answer

A) monopoly 
B) externalities 
C) public goods 
D) the special-interest effect 
A) monopoly 
B) externalities 
C) public goods 
D) the special-interest effect

Question 19

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 20

Legislation that contains a number of projects benefiting local interests at the expense of the general taxpayer is called

Accepted Answer

A) balanced-budget legislation. 
B) pork-barrel legislation. 
C) voucher legislation. 
D) public-goods legislation. 
A) balanced-budget legislation. 
B) pork-barrel legislation. 
C) voucher legislation. 
D) public-goods legislation.

Which of the following is true?

In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources?

Most income transfer programs in the United States

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

Public choice analysis indicates that politicians will find

Young John recently took a job with the U.S. Department of Agriculture. His supervisor gave him an assignment and a two-week deadline. He finished the job in three days and turned it in. Now his coworkers are mad at John. Why?

Combined federal, state, and local government expenditures in the United States were approximately 9 percent of the gross domestic product (GDP) in 1930. How large were government expenditures as a share of GDP in 2012?

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of

The rational-ignorance effect refers to the

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

Which of the following explains why managers of government agencies have little incentive to achieve operational efficiency?

Public choice theory assumes each voter will tend to support the political candidate who offers

According to the shortsightedness effect, politicians tend to favor projects with

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

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

The rational-ignorance effect is a result of

Which of the following factors weakens the case for government provision of goods and services relative to private-sector provision?

Transfer payments are

Legislation that contains a number of projects benefiting local interests at the expense of the general taxpayer is called

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

Filters

Exam 6: The Economics of Political Action

Which of the following is true?

In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources?

Most income transfer programs in the United States

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

Public choice analysis indicates that politicians will find

Young John recently took a job with the U.S. Department of Agriculture. His supervisor gave him an assignment and a two-week deadline. He finished the job in three days and turned it in. Now his coworkers are mad at John. Why?

Combined federal, state, and local government expenditures in the United States were approximately 9 percent of the gross domestic product (GDP) in 1930. How large were government expenditures as a share of GDP in 2012?

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of

The rational-ignorance effect refers to the

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

Which of the following explains why managers of government agencies have little incentive to achieve operational efficiency?

Public choice theory assumes each voter will tend to support the political candidate who offers

According to the shortsightedness effect, politicians tend to favor projects with

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

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

The rational-ignorance effect is a result of

Which of the following factors weakens the case for government provision of goods and services relative to private-sector provision?

Transfer payments are

Legislation that contains a number of projects benefiting local interests at the expense of the general taxpayer is called

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

Filters