According to the median-voter theorem, the chosen policy will be the one preferred by the:
A. median voter.
B. greatest average of voters, rather than the majority of voters.
C. the average voter, rather than the largest number of voters.
D. largest number of voters, rather than the average voter.
A. median voter.
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Assuming that transactions costs are sufficiently low, the Coase theorem results in the economic pie being maximized. What impact do legal constraints have on this prediction of the Coase theorem?
What will be an ideal response?
When the price level falls, households and firms reduce their holdings of money, leading to a lower interest rate and an increase in borrowing and an increase in RGDP demanded
a. True b. False Indicate whether the statement is true or false
Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?
A) Because when GDP in one year is higher than in another year, there is no way to tell why it is higher. Is it because output is higher, prices are higher, etc.? This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because output is higher. B) Because when GDP in one year is higher than in another year, there is no way of knowing if the quality of goods produced is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of the goods produced is higher. C) Actually the question is incorrect. Economists prefer to compare GDP figures instead of Real GDP figures. D) Because Real GDP is easier to compute than GDP. E) Because when GDP in one year is higher than in another year, there is no way to tell if the quality of life is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of life is higher.
If inflation is a threat, then the Fed will conduct monetary policy aimed at
A) increasing the interest rate which then will shift aggregate demand to the right. B) decreasing the interest rate which then will shift aggregate demand to the right. C) decreasing the interest rate which then will shift aggregate demand to the left. D) increasing the interest rate which then will shift aggregate demand to theleft.