What is the best explanation for the fact that the only two political candidates in an election often have very similar stands on the issues during an election?
A. They are logrolling.
B. They are behaving according to the median voter rule.
C. Democrats and Republicans actually agree on most issues.
D. They need to please special interest groups in order to be elected.
Answer: B
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Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model? a. The reserves account becomes more negative (less positive) and monetary base falls
b. The reserves account becomes more negative (less positive) and monetary base falls. c. The reserves account and monetary base remain the same. d. The reserves account becomes more negative (less positive) and monetary base rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
When a currency is described as overvalued, this typically implies:
A. the exchange rate is higher than one year previous. B. it is overvalued relative to the exchange rate set by the nation's central bank. C. its current market value is higher than the value that is thought to be consistent with purchasing power parity. D. it is selling at an exchange rate less than one.
In the short run, expansionary fiscal policy usually will
A) decrease the price level and decrease real GDP. B) increase the price level and increase real GDP. C) decrease the price level and increase real GDP. D) increase the price level and decrease real GDP.
If a product has zero external costs, then
A) marginal social cost equals marginal private cost. B) marginal social cost is greater than marginal private cost. C) marginal social cost is less than marginal private cost. D) marginal social cost equals zero. E) We need more information to determine the relationship between marginal private cost and marginal social cost.