Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted, even when economic inefficiency results. In economics this is referred to as the
a. long-term effect.
b. political-fallacy effect.
c. shortsightedness effect.
d. inefficiency effect.
C
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Economies of scale, control over a scarce input, and patents are all examples of barriers to entry
a. True b. False Indicate whether the statement is true or false
The purpose of fiscal policy should be to
a. balance the budget to be fiscally responsible. b. balance aggregate supply and aggregate demand. c. keep taxes low to keep voters happy. d. minimize government spending to avoid wasting money.
If the Fed fears an economic downturn, it would be most likely to
a. buy additional bonds in order to reduce the federal funds rate. b. buy additional bonds in order to increase the federal funds rate. c. sell additional bonds in order to increase the federal funds rate. d. sell additional bonds in order to reduce the federal funds rate.
Gross public debt minus all government interagency borrowing is
A. an entitlement. B. net public debt. C. the money supply. D. U.S. Treasury bonds.