Evidence suggests that, with rare exceptions, economic policies are not manipulated in an effort to influence electoral outcomes. Use the Lucas critique to explain why not
What will be an ideal response?
The strategy that would generate a political business cycle relies on naive voters to reward office holders for a short-term improvement in economic conditions. Once the strategy is implemented, however, voters get to experience the negative consequences of rising inflation and contractionary policies. Policy makers (and influencers) wise enough to recognize the change in expectations will not be tempted to attempt such a strategy.
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If a firm has monopoly power in the market for its output, the marginal revenue product of labor
a. is no different than for a competitive firm. b. is less for each unit of labor than for a competitive firm. c. continuously slopes upward instead of turning downward. d. is greater for each unit of labor than for a competitive firm.
According to this Application, in the year 2075, the portion of GDP devoted to spending on Social Security, Medicare and Medicaid is expected to be
A) significantly less than the share of GDP devoted to these programs today. B) roughly equal to the total amount of GDP today. C) greater than the consumption spending component's share of GDP in 2075. D) larger than total federal spending's share of GDP today.
England's mercantilist principles:
a. were active from the early 1600s. b. were active from the early 1700s. c. were a response to Spanish tariffs. d. were pursued by Charles II after 1685.
The graph shown portrays a subsidy to buyers. The amount of money spent on this subsidy by the government is:
A. $3,600.
B. $2,400.
C. $6,000.
D. $800.