One reason for the success that firms have in getting the government to erect and maintain barriers to foreign competition is members of Congress who engage in logrolling, where members in districts with protected industries
A) agree to trade votes on issues that concern other members in order to uphold tariffs.
B) are permitted to not only cast their own votes but also cast votes for other Congressional members in their home state with respect to any bills involving the protected industry.
C) are legally allowed to give cash payments to other members of Congress to secure their support for the protected industry.
D) can bypass presidential approval of a bill involving the protected industry and have members of Congress directly sign the bill into law.
Answer: A
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A negative shock in aggregate demand will likely result in ________
A) a permanent change in output, if the central bank responds by lowering interest rates B) no permanent change in the equilibrium inflation rate, unless the central bank responds by lowering interest rates C) an eventual increase in aggregate supply for any inflation rate, if the central bank responds by lowering interest rates D) all of the above E) none of the above
The city of Austin can buy roads or light rail. If 10 miles of roads cost $1 million and 2 miles of light rail cost $10 million, what is the city's opportunity cost of 1000 miles of roads?
a. $100 million b. 2 miles of light rail c. 200 miles of light rail d. $50 million e. $1,000 million
Which one of the following is a tool of monetary policy for altering the reserves of commercial banks?
a. Treasury deposits b. Federal Reserve Notes c. Reserve ratio d. Budget surplus or budget deficit
The law of diminishing marginal product states that
A) output will continue to increase indefinitely if more variable factors of production are added to an existing stock of fixed factors. B) successive equal-sized increases in labor, when added to fixed factors of production, will result in smaller increases of output. C) a doubling all inputs will double output. D) variable costs tend to decrease with output.