The self-interest model of government:
A. suggests that government officials are selfish.
B. explains why there are limits on government taxation and spending.
C. shows why some government projects take place even if the costs exceed the benefits.
D. All of these are correct.
Answer: D
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The benefit from an additional unit of a good or service that people other than the consumer of that good or service receives is the
A) marginal private benefit. B) marginal external benefit. C) marginal social benefit. D) opportunity cost.
Strategic advertising in the cola market
A) significantly expands the size of the market. B) brings in few new customers and primarily shifts market share among rivals. C) shifts market demand to the right, increasing quantity sold and decreasing prices. D) has no impact on the market.
If you deposit $500 cash into your account at a commercial bank. If it faces a 10 percent required reserve ratio, as a result of your deposit, the bank will:
a. have $450 of additional excess reserves. b. be capable of lending an additional $5,000. c. be capable of lending an additional $500 d. have $50 of additional excess reserves.
The supply curve for a particular bond is horizontal
a. True b. False