Question 1

In 2012, government income transfers redistributed what percentage of national income?

Accepted Answer

A) 1.1 percent 
B) 7.7 percent 
C) 17.4 percent 
D) 25.5 percent 
A) 1.1 percent 
B) 7.7 percent 
C) 17.4 percent 
D) 25.5 percent

Question 2

Public choice theory suggests politicians will be most likely to favor redistribution of income from

Accepted Answer

A) the rich to the poor. 
B) unorganized taxpayers to well-organized interest groups. 
C) middle-income taxpayers to both the rich and the poor. 
D) well-organized businesses and labor groups to consumers. 
A) the rich to the poor. 
B) unorganized taxpayers to well-organized interest groups. 
C) middle-income taxpayers to both the rich and the poor. 
D) well-organized businesses and labor groups to consumers.

Question 3

The branch of economics that applies the principles and methodology of economics to the operation of the political process is known as

Accepted Answer

A) private choice analysis. 
B) public choice analysis. 
C) government operations analysis. 
D) policy preference analysis. 
A) private choice analysis. 
B) public choice analysis. 
C) government operations analysis. 
D) policy preference analysis.

Question 4

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 5

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

Accepted Answer

A) the rich to the poor. 
B) unorganized taxpayers to well-organized interest groups. 
C) well-organized business groups to consumers. 
D) none of the above. 
A) the rich to the poor. 
B) unorganized taxpayers to well-organized interest groups. 
C) well-organized business groups to consumers. 
D) none of the above.

Question 6

Public choice theory indicates that the behavior of people in government

Accepted Answer

A) differs from the behavior of people in the private sector because they are motivated by the public interest rather than their own personal self-interest. 
B) differs from the behavior of people in the private sector because public sector decision roles do not allow people to pursue their own self-interests. 
C) is the same as people in the private sector only if decisions are made by majority vote. 
D) is best understood by applying the same principles we use to predict the behavior of people in the private sector. 
A) differs from the behavior of people in the private sector because they are motivated by the public interest rather than their own personal self-interest. 
B) differs from the behavior of people in the private sector because public sector decision roles do not allow people to pursue their own self-interests. 
C) is the same as people in the private sector only if decisions are made by majority vote. 
D) is best understood by applying the same principles we use to predict the behavior of people in the private sector.

Question 7

Market allocation and the political process differ in that

Accepted Answer

A) competition is present in the market sector but not in the political sector. 
B) scarcity is a constraint in the market sector but not the political sector. 
C) there is a one-to-one link between payment for and receipt of a good in the market sector, but this is often not true in the political sector. 
D) in the political sector, voters have a strong incentive to acquire information that will help them make better decisions, but in the market sector, consumers do not have much incentive to acquire information. 
A) competition is present in the market sector but not in the political sector. 
B) scarcity is a constraint in the market sector but not the political sector. 
C) there is a one-to-one link between payment for and receipt of a good in the market sector, but this is often not true in the political sector. 
D) in the political sector, voters have a strong incentive to acquire information that will help them make better decisions, but in the market sector, consumers do not have much incentive to acquire information.

Question 8

Use the figure below to answer the following question(s).
Figure 6-1  
-Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. A tariff on imported steel to protect jobs in the domestic steel industry that raises the cost of many products for consumers would be considered which type of project?

Accepted Answer

A) type A 
B) type B 
C) type C 
D) type D 
A) type A 
B) type B 
C) type C 
D) type D

Question 9

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 10

When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the

Accepted Answer

A) tragedy of interest. 
B) special-interest effect. 
C) unorganized interest effect. 
D) shortsightedness effect. 
A) tragedy of interest. 
B) special-interest effect. 
C) unorganized interest effect. 
D) shortsightedness effect.

Question 11

Most voters will likely be concerned with

Accepted Answer

A) most issues since most issues have some impact, however slight, on each citizen. 
B) only a few special issues (those that exert the most impact on the voters' personal welfare). 
C) most issues since information on most issues can be obtained at a low cost. 
D) the views of a particular political candidate on all issues. 
A) most issues since most issues have some impact, however slight, on each citizen. 
B) only a few special issues (those that exert the most impact on the voters' personal welfare). 
C) most issues since information on most issues can be obtained at a low cost. 
D) the views of a particular political candidate on all issues.

Question 12

The major categories of federal government spending are

Accepted Answer

A) health care, national defense, Social Security, and other income transfers. 
B) law enforcement, environmental protection, and national defense. 
C) public education, garbage collection, and public parks. 
D) health care, public education, and highways. 
A) health care, national defense, Social Security, and other income transfers. 
B) law enforcement, environmental protection, and national defense. 
C) public education, garbage collection, and public parks. 
D) health care, public education, and highways.

Question 13

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 14

The shortsightedness effect suggests that

Accepted Answer

A) politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future. 
B) politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period. 
C) voters will tend to weigh future costs and benefits more heavily than current costs and benefits. 
D) legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups. 
A) politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future. 
B) politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period. 
C) voters will tend to weigh future costs and benefits more heavily than current costs and benefits. 
D) legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.

In 2012, government income transfers redistributed what percentage of national income?

Public choice theory suggests politicians will be most likely to favor redistribution of income from

The branch of economics that applies the principles and methodology of economics to the operation of the political process is known as

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

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

Public choice theory indicates that the behavior of people in government

Market allocation and the political process differ in that

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

When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the

Most voters will likely be concerned with

The major categories of federal government spending are

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?

The shortsightedness effect suggests that

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

In 2012, government income transfers redistributed what percentage of national income?

Public choice theory suggests politicians will be most likely to favor redistribution of income from

The branch of economics that applies the principles and methodology of economics to the operation of the political process is known as

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

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

Public choice theory indicates that the behavior of people in government

Market allocation and the political process differ in that

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

When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the

Most voters will likely be concerned with

The major categories of federal government spending are

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?

The shortsightedness effect suggests that

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