According to the public-choice view,
a. laissez-fare is always the best economic policy.
b. macroeconomic policymakers are only interested in the social good.
c. policymakers often act in irrational ways or out of ignorance.
d. politics often trump economic theory in policymaking.
e. both c and d.
D
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Chris pays $10,000 for a newly issued two-year government bond with a $10,000 face value and a 6 percent coupon rate. One year later, after receiving the first coupon payment, Chris sells the bond. If the current one-year interest rate on government bonds is 7 percent, then the price Chris receives is:
A. greater than $10,000. B. $700. C. less than $10,000. D. $10,000.
Countries that have high rates of savings also have
A) high rates of investment. B) low rates of investment. C) stock market bubbles. D) low rates of growth. E) no international trade.
The GDP deflator does not differ from the CPI in its measurement of inflation in that it:
A. measures the price changes of all goods, not just those in a typical consumer's basket. B. uses the total quantities that are produced, not the ratio of what a typical consumer might consume. C. does not include imports, which may have a real effect on the typical consumer's cost of living. D. is the most widely used measure of price level changes for goods and services for consumers.
The prisoner's dilemma demonstrates that
a. breaking out of prison may be too costly for most prisoners b. the opportunity cost of being a prisoner is indeterminate c. the dominant strategies followed by two prisoners may lead to disequilibrium that is unpredictable d. the weak strategy may be followed by both prisoners if the opportunity cost is low e. the dominant strategies followed by two players may lead to an equilibrium that is less not optimal for both players together