According to Buchanan and Wagner, why is there a political bias toward expansionary fiscal policy rather than contractionary fiscal policy?
A) In a democracy, expansionary fiscal policy prescriptions are more politically popular than are the policy prescriptions associated with contractionary fiscal policy.
B) In a democracy, contractionary fiscal policy prescriptions are more policitally popular than are the policy prescriptions associated with expansionary fiscal policy.
C) They assert that empirical evidence has shown that Keynesian fiscal policy prescriptions have been successful at closing recessionary gaps, but not inflationary gaps.
D) ?They assert that empirical evidence has shown that Keynesian fiscal policy prescriptions have been successful at closing inflationary gaps, but not recessioinary gaps.
E) ?none of the above
A
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A deadweight loss occurs whenever
A) the total benefit of a good does not equal its total cost. B) the marginal social benefit of a good does not equal its marginal social cost. C) there is perfect price discrimination. D) there is no consumer surplus.
The Fed's principal decision-making body, which directs buying and selling U. S. government securities, is known as the:
a. Federal Deposit Insurance Corporation. b. District Board of Governors. c. Federal Open Market Committee. d. Reserve Requirement Regulation Conference.
Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?
a. an increase in demand b. a decrease in demand c. a decrease in supply d. a lower price ceiling
What can the government do to solve the problem of excessive use of common resources?