Public choice analysis indicates that it will be politically more attractive to
a. enact restrictive fiscal policy during an economic expansion than to enact expansionary fiscal policy during a recession.
b. enact expansionary fiscal policy during an economic expansion than to enact restrictive fiscal policy during a recession.
c. enact expansionary fiscal policy during a recession than to enact restrictive fiscal policy during an economic expansion.
d. raise taxes than to increase spending.
C
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Which of the following would be considered an example of monetary policy?
A. A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. B. A decision by a developing country to reduce government control of the economy and to become more market-oriented. C. A reduction in income tax rates. D. Provision of additional cash to the banking system.
Some policymakers have argued that products like cigarettes, alcohol, and sweetened soda generate negative externalities in consumption. If the government decided to impose a tax on soda, the government will cause
A) producers to internalize the externality. B) the external cost to drinking soda to become a private cost paid by the government. C) consumers to internalize the externality. D) the external cost to drinking soda to become a private cost paid by producers.
If every participating firm has the same marginal benefit from industrywide advertising, then ________.
A) requiring every firm to pay the same amount for advertising is not likely to create dissatisfaction amount the firms B) every firm should be required to pay nothing for the advertising C) requiring every firm to pay different amounts for advertising is not likely to create dissatisfaction amount the firms D) requiring every firm to pay the same amount for advertising is likely to create dissatisfaction amount the firms
Which of the following is correct?
a. In the national income accounts, investment and private saving refer to the same thing. b. In a closed economy if national saving is greater than zero, then everyone must be saving. c. The financial system channels funds from savers to borrowers. d. People whose consumption exceeds their income are savers.