Which of the following is an example of political action that reflects the shortsightedness effect?
a. budget surpluses
b. the promise of future benefits without providing for their funding
c. spending on roads and highways
d. spending on programs that transfer income from the rich to the poor
B
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The concerns about world food production raised by Malthus have not materialized because:
A) input prices have fallen over time. B) crop prices have risen over time. C) Malthus was wrong about the diminishing returns to labor in agriculture. D) technological improvements have increased our ability to produce food over time.
A monopolistic competitor behaving in a profit-maximizing way will
A) not advertise. B) advertise as much as it can in order to increase its sales. C) advertise to the point where the additional sales from advertising equal the additional marginal costs of the product. D) advertise to the point where the additional revenue from one more dollar of advertising just equals the extra dollar cost of advertising.
Which of the following statements is not correct?
a. Critics of advertising argue that firms advertise to manipulate consumers' tastes. b. Defenders of advertising argue that advertising provides valuable product information to consumers. c. An industry with many brand name products will be more competitive than one with many generic products. d. The willingness of a firm to spend a large amount of money on advertising can signal the quality of the product.
What is true of the slope of the aggregate expenditure line when factors of investment, government spending, and net exports are taken into account?
a. It is always 90 degrees. b. It is always horizontal. c. It is always positive. d. It is always negative.