Exam 5: Governments Role and Government Failure

Monetary policy attempts to change the level of spending by altering interest rates.

(Consider This) Voter failure describes the situation where

A budget deficit will require the government to issue bonds to fill in the gap in the budget.

(Last Word) In 2004, Congress passed a corporate tax relief bill with 276 provisions for tax breaks to groups such as restaurant owners, Hollywood producers, and NASCAR track owners. This is an example of the

As long as government officials have to be elected, they are always held accountable for their policy decisions and choices.

Economists call the pursuit of a transfer of wealth through government at someone else's expense

Even if a majority of the population wants a law and the law is passed, the outcome may still be economically inefficient.

Which would be an avenue for resolving the inefficiencies associated with majority voting?

Suppose the U.S. House of Representatives is debating a bill to fund construction and maintenance for the nation's highway system. Representative Sandy Shady adds a provision to the bill that would fund a new public art museum in her district. The authorization of expenditure for the museum would be an example of

Public choice theory focuses on the economics of

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community. No vote trading is allowed. If the tax cost of this proposed project is $600 per person, a majority vote will

Which of the following is considered a potential solution to some regulatory capture?

Suppose a college economics department decides to use a single economics text for all sections of principles of economics. Also assume that the three individual members of the textbook selection committee have the following preferences. Assuming all other textbook qualities except analytical level are the same, paired-choice majority voting will result in the committee

One consequence of the paradox of voting is that whoever sets the agenda of a vote could practically predetermine the results of the vote.

The size and scope of government inhibit the flow of information to decision makers, leading to inefficient outcomes.

Chronic budget deficits can be attributed to

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

Regulatory capture in government happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry.

Suppose lawyers seek legislation to limit the use of computer software that enables people to use their personal computers to self-prepare their own wills, trusts, and other legal documents. This is an example of

To reduce politicization of policy making, many countries have given control of to politically independent central banks.