Exam 5: Governments Role and Government Failure

A special-interest issue is one whose passage yields

The situation where politicians make decisions that will raise their chances of reelection, even if those decisions are detrimental to the general public, is referred to as the

The special-interest effect in government is the reason why firms in some industries are willing to pay huge amounts of money to lobbyists.

The major problem with paired-choice majority voting is that the outcome

(Consider This) Suppose voters pass laws that restrict immigration, which results in lower national output and higher prices for consumer goods.This would be an example of

Political logrolling always produces economically inefficient outcomes.

So-called business cycles refer to the multiyear periods

Which of the following is a key difference between the economic activities of government and those of private firms?

Public choice economists hold that politicians will

The pursuit through government of a "transfer of wealth" at someone else's expense refers to

The invisible hand guides government's economic activity just as it does with private economic activity.

Government's ability to force people to do things involuntarily is

As it relates to the political process, the principal-agent problem results from the

Governments try to smooth business cycles by using the following policies, except

Deregulation

The government adds to its overall public debt whenever it

Government fiscal policy involves changing which of the following?

According to the paradox of voting,

A debt crisis refers to how much government spending exceeds tax revenues in a given year.

Majority voting may produce economically inefficient outcomes because it