What is meant by the term government failure as described in this chapter?
Please provide the best answer for the statement.
Government failure refers to outcomes in the political process or from government decision-making that are economically inefficient. These failures can arise from a lack of information about voter preference. They occur more often, however, because the incentive structure for elected or government officials puts their interests, or special groups they represent, at odds with voter preferences or with the interests of the general public.
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Consider two economies: A and B. The nominal interest rate is the same in both economies, but the rate of inflation is higher in economy B. Which of the following statements will then be true?
A) The real interest rate will be the same in both economies. B) The real interest rate will be higher in economy B. C) The real interest rate will be higher in economy A. D) Whether the real interest rate is higher in economy A or B will depend on the number of borrowers in both economies.
In the above figure, if this natural monopoly is not regulated the deadweight loss to society is
A) ecf. B) ebc. C) gac. D) gde.
Which of the following multiplier concepts is most important from the point of view of devising an activist policy?
A) the income and money-creation multipliers B) the dynamic multipliers, that is the timing of multiplier effects given a policy change C) the long-term multipliers, that is the total effect from several time periods given a policy change D) the money-creation multiplier
Generally, the supply of a resource in the short run will be
a. more elastic than in the long run. b. less elastic than in the long run. c. equally elastic as the supply of the resource in the long run. d. directly related to the elasticity of demand for the product that the resource helps produce.