The theory of public choice suggests that
A) government agencies tend to be inefficient because the people running them do not understand the concept of opportunity cost.
B) government agencies tend to be inefficient because they are subject to institutional arrangements in which managers do not have an incentive to be efficient.
C) the goods provided by government, whether public or private goods, are not scarce.
D) you can lower your tax bill if you are careful not to consume too many government resources, regardless of what your neighbors do.
B
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Which of the following events create an outward shift of the production possibilities curve?
A. The United States moves resources from the production of goods for domestic production to the production of goods for export. B. Tax reductions reduce the cost and increase the amount of investment in factories, machinery, and research and development. C. There is an migration of young people to another country where there is more political freedom. D. The unemployment rate falls from 33 percent to 12 percent.
Which of the following explains why the government should not increase spending by the entire amount of the AD shortfall to move the economy to full employment?
A. The multiplier process will contribute to an additional increase in aggregate demand that will cause an inflationary gap. B. The price level is constant. C. The government can increase taxes to create an additional increase in aggregate demand. D. Price level changes will make up for the difference between the fiscal stimulus and the AD shortfall.
If the United States imposed higher tariffs and more restrictive quotas that reduced imports,
A) employment in the U.S. would be higher. B) the U.S. would not gain at the cause expense to other countries. C) the U.S. would gain at the expense of other countries. D) the wage rates of U.S. workers would be higher.
The labor force is defined as
A. everyone 16 years of age or older. B. the employed plus the unemployed. C. the employed minus the unemployed. D. the civilian non-institutional population over the age of 16.