The public choice model can be used to examine voting models that contrast the manner in which collective decisions are made by governments (state, local, and federal) and the manner in which individual choices are made in markets
Which of the following descriptions is consistent with the difference between collective decision-making and decision-making in markets?
A) Individuals are less likely to see their preferences represented in the outcomes of government policies than in the outcomes of markets.
B) The cost of a government policy is determined by a majority vote of members of the public; decisions made in markets are based on individual willingness to pay.
C) Choices made through government policies are more important than decisions individuals make through markets.
D) Everyone who votes must agree with a decision made collectively through government, but in markets individuals can make their own choices.
A
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Short-run equilibrium output is where the level of output:
A. equals aggregate expenditure. B. equals real GDP per capita. C. equals potential output. D. maximizes firm profits.
By using only the aggregate demand curve, we can determine
A) only the price level. B) only the quantity of real GDP. C) both the price level and quantity of real GDP. D) neither the price level nor the quantity of real GDP.
The most common type of macroeconomic imbalance is overly expansionary fiscal policies that create large government budget deficits, often financed by a high growth rate of the money supply
Indicate whether the statement is true or false
A major weakness of the kinked demand curve model is that it does not explain how the equilibrium price, i.e., the price at the kink in the demand curve, is determined
Indicate whether the statement is true or false