Majority voting fails to incorporate the strength of the preferences of individual voters, and therefore:
A. Reduces the power of the median voter
B. Is the primary reason for public sector failure
C. May produce economically inefficient outcomes
D. Creates the opportunity for the fallacy of limited decisions
C. May produce economically inefficient outcomes
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The graph illustrates the demand for peanuts. Peanuts are a normal good because the
A) demand curve shows that if the price of peanuts rises, there is a movement along the demand curve to a lower quantity demanded. B) demand for peanuts increases when income increases. C) demand for peanuts increases when the price of one of its substitutes rises. D) demand curve for peanuts slopes downward. E) peanuts have both substitutes and complements.
Did Mother Teresa create positive externalities when she helped the poor of Calcutta?
A) No, because the poor continued to exist and her efforts were largely unsuccessful. B) No, because she fully calculated all the benefits of her activities. C) Yes, because her activities have inspired and benefited countless others whom Mother Teresa could not have known about or taken into account. D) Yes, because her activities had nothing to do with the search for economic profit.
Although it may be difficult to draw causal relationships, still statistical evidence shows that, over time,
a. there is no relationship between levels of saving and economic growth b. there is an inverse relationship between levels of saving and economic growth c. higher levels of saving are associated with lower levels of economic growth d. lower levels of saving are associated with lower levels of economic growth e. lower levels of saving are associated with higher levels of economic growth
If the demand for money is insensitive to the interest rate, then the most effective expansionary policy would be
a. fiscal policy. b. monetary policy. c. neither fiscal nor monetary policy. d. both fiscal and monetary policy.