Exam 6: The Economics of Political Action

Economics indicates that government funding of special interest projects and favoritism of some business firms relative to others will lead 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

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

According to public choice theory, which of the following groups will likely benefit the most from government income transfers under a system of representative democracy?

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)

When governments become more heavily involved in taxing one group in order to provide benefits to other groups, which of the following will be encouraged?

The term pork-barrel legislation refers to

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

In 2006, the American Association of Retired Persons (AARP) spent over $70 million on lobbying-related expenses in an attempt to get policies enacted that would benefit retirees. In economics, the term used to describe such activity is

Approximately what percent of government transfer payments are directed toward the poor (means tested)?

Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient?

Is calling a voter rationally ignorant the same as calling her irrational? Explain.

Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient?

A politician may be considered an entrepreneur in the sense that

Of all government spending in the United States, what amount occurs at the federal level?

The rational-ignorance effect is a result of

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. Programs that give subsidies to a small group of producers at general taxpayer expense would be considered

Which of the following is a distinguishing characteristic of a user charge?

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

Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?