Define incrementalism and give two reasons why incrementalism might be efficient
What will be an ideal response?
Incrementalism is the theory that an agency's budget in one year will tend to be its last year's budget plus some additional increment. Incrementalism might be efficient given an understanding of the special interest theory of government and they fact that it is often difficult to measure the benefits of federal programs. Special interest theory suggests that politicians will maximize political support by giving all special interests an incremental increase in benefits. The fact that it is often difficult to measure the benefits of special programs suggests that a legislature may be able to do no better than giving each agency an incremental increase each year.
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The Herfindahl-Hirschman Index is used as a guideline to determine if a market is competitive or concentrated. Calculate the index value for each market described below
a. 100 firms, each of which produces 1 per cent of market output b. 50 firms, each of which produces 2 per cent of market output c. 25 firms, each of which produces 4 per cent of market output d. 20 firms, each of which produces 5 per cent of market output e. 10 firms, each of which produces 10 per cent of market output f. 5 firms, each of which produces 20 per cent of market output g. 2 firms, each of which produces 50 per cent of market output
In any given year, many people at the tails of the income distribution are only there temporarily _____
a. because of changes in the tax code b. making it difficult to track them for determining progressivity c. thereby overstating the progressive nature of the tax system d. making it important to look at the progressivity of the tax system in terms of lifetime income
One reason the government enacts fiscal policy instead of waiting for the economy to correct itself is the automatic adjustment:
A. can take a very long time. B. means a lower level of potential GDP. C. will cause permanent inflation. D. is generally not supported by government officials.
The demand curve for Apple iTune music downloads is unstable because
a. consumers of music downloads are irrational b. Apple‘s production costs are unstable c. it is unclear how Amazon, its primary competitor, will react to Apple's pricing strategy d. the market for music downloads is unpredictable e. consumers of music downloads have the option to download music for free