In making the case against government, discuss the two main points about special interest groups
Legislation that on the surface looks like it is intended to benefit the public in general is often going to greatly benefit special interest groups. For example, the tax credit for first-time home buyers was said to be needed to increase home ownership. However, two of the groups that lobbied extensively for the passage of the legislation were the building industry and realtors because those groups knew that they would benefit greatly from such legislation. Another argument against government in the area of special interest groups is that special interest groups often lobby for legislation that is more concerned with increasing their slice of the pie (transfers) than with increasing the size of the economic pie (true economic growth).
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Decreases in the NAIRU represent a:
A) leftward shift in the aggregate demand curve. B) leftward shift of the long-run aggregate supply curve. C) rightward shift of the long-run aggregate supply curve. D) rightward shift in the aggregate demand curve.
When the Fed purchases $1000 worth of government bonds from the public, the U.S. money supply eventually increases by
a. more than $1000. b. exactly $1000. c. less than $1000. d. None of the above are correct.
Refer to Table 9.2. (Data are expressed in billions of dollars.)Table 9.2Full Employment Income (Output)Consumers Desire to SpendInvestors Desire to SpendTotal Private SpendingTotal Saving$500$300$250$________$________600375250$________$________700450250$________$________800525250$________$________If the full-employment level of income (YF) in Table 9.2 is $800 billion,
A. The economy is in equilibrium. B. There is an inflationary gap of $250 billion. C. There is a recessionary gap of $275 billion. D. There is a recessionary gap of $25 billion.
"NAFTA" stands for:
A. North African Free Trade Area. B. North American Free Trade Agreement. C. North Asian Free Trade Agreement. D. New Zealand-Australia Free Trade Agreement.