In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?
a. The program provides substantial benefits to a small interest group, and the costs are widespread among voters.
b. Both the benefits and costs of the program are widespread among voters.
c. The program is financed by a user charge that makes the individuals who benefit from the program pay for its cost.
d. The program provides widespread benefits to all voters and imposes a significant cost on a small interest group.
A
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As several eastern states began to legalize casino gambling, the revenues of casinos in Atlantic City began to ________ and their profits ________
A) fall; decreased B) rise; decreased C) fall; increased D) rise; increased
Other things constant, the elimination of factor price distortions in developing countries would most likely
(a) decrease rural-urban migration. (b) have little effect on rural-urban migration. (c) increase rural-urban migration. (d) increase urbanization.
Which of the following is a major problem with deflation?
A) Money loses value so rapidly that economic agents will be reluctant to hold money. B) Economic agents tend to put off purchases in anticipation of lower prices for goods and services, leading to a downward spiral in economic activity. C) Low prices for goods and services tend to result in massive shortages in most markets. D) Money supply cannot keep pace with consumption spending.
On the modern Phillips curve, the beginning of a recession is shown by ________
A) an upward movement along the Phillips curve to a higher inflation rate B) an upward shift of the Phillips curve leading to higher inflation rates for any unemployment rate C) a downward shift of the Phillips curve leading to lower inflation rates for any unemployment rate D) a downward movement along the Phillips curve to higher unemployment rates E) none of the above