What are the benefits of intergovernmental competition? Do those benefits disappear if the mobility of individuals in the society is limited? Why or why not?
What will be an ideal response?
Intergovernmental competition gives individuals a variety of governments to choose from. By moving from one government to another they can choose from among different bundles of local public goods. Intergovernmental competition also facilitates comparisons among local governments, giving citizens a way to compare the performance of their own governments by giving a benchmark of quality. The benefits associated with intergovernmental competition do not disappear if mobility is limited because individuals can still compare their own governments to nearby governments.
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Which of the following would be likely to change the relative efficiency of trucks versus trains in carrying freight?
A) Higher wages for truck drivers B) More powerful locomotives C) Tolls on interstate highways D) All of the above.
During 2008, oil price increases
A) did not shift the short-run aggregate supply curve as far to the left as similar increases had 30 years earlier. B) shifted the short-run aggregate supply curve farther to the left than similar increases had 30 years earlier. C) shifted the aggregate demand curve farther to the left than similar increases had 30 years earlier. D) shifted the aggregate demand curve farther to the right than similar increases had 30 years earlier.
Can a Keynesian still believe in an active counter-cyclical policy if she adopts the assumption of rational expectations?
A) No, it destroys the case for active policy. B) Yes, so long as she continues to assume wage and price rigidity. C) Yes, if she also adopts the assumption of wage and price flexibility. D) Yes, if she assumes that economic policy shifts are anticipated in advance.
Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers
a. True b. False Indicate whether the statement is true or false