The shortsightedness effect suggests that
a. politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future.
b. politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period.
c. voters will tend to weigh future costs and benefits more heavily than current costs and benefits.
d. legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.
A
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If the optimal forecast of the return on a security exceeds the equilibrium return, then
A) the market is inefficient. B) no unexploited profit opportunities exist. C) the market is in equilibrium. D) the market is myopic.
To signal to your insurance company that you are a low risk individual, to secure a lower premium, you should
a. Accept an insurance policy with a high deductible b. Accept an insurance policy with a low deductible c. Accept an insurance policy with a co-payment d. Both A&C
What is an entitlement?
What will be an ideal response?
If the GDP gap is positive, then:
A. potential GDP is greater than actual GDP. B. actual GDP is greater than potential GDP. C. the inflation rate is falling. D. the unemployment rate is rising.