When deciding whether to undertake a large public works project (such as building a road, bridge, sports venue, etc.) the government must determine not only the costs, but also
A) the needs of the contractors.
B) the benefits to the community.
C) the restrictions on labor unions.
D) the competition from other governments.
Answer: B) the benefits to the community.
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According to the theory of structural patterns of development, which of the following tends to occur as a country develops?
a. a shift from agriculture to industry and services b. an increase in the percentage of income spent on food c. growth of the rural sector d. a decline in trade as a share of GNP
The purpose of the Clean Air Act (1970) was to:
A. control negative externalities. B. improve competition across international markets. C. reduce market power. D. help make information easily obtainable for producers and consumers.
The crowding-out effect of expansionary fiscal policy suggests that:
A. government spending is increasing at the expense of private investment. B. saving is increasing at the expense of investment. C. private investment is increasing at the expense of government spending. D. imports are replacing domestic production.
Price floors
A. provide free market incentives for producers. B. are used by advocates of the free market. C. create surpluses by setting the price above equilibrium. D. create shortages by setting the price above equilibrium.