Economic forces:
A. are less powerful than social and political forces.
B. are more powerful than social forces but less powerful than political forces.
C. are more powerful than social and political forces.
D. can be more or less powerful than political and social forces depending on the circumstances.
Answer: D
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Once monetary policy is dedicated to controlling the level of nominal GDP, then fiscal policy can be used to
A) choose the overall level of interest rates, with a high budget surplus implying a high level of interest rates. B) choose the overall level of interest rates, with a high budget deficit implying a high level of interest rates. C) control the level of inflation, with a high budget surplus implying a faster rate of inflation. D) control the level of inflation, with a high budget deficit implying a faster rate of inflation.
Which of the following statements best describes the study of economics?
A. Economics studies how people maximize returns in the stock market. B. Economics studies how the Federal Reserve handles fluctuation in business cycles. C. Economics studies how governments determine appropriate tax rates. D. Economics studies how individuals and groups manage scarce resources.
Match each of the following characteristics or scenarios with either the term negative externality or the term positive externality.
a. Overallocation of resources: b. Tammy installs a very nice front garden, raising the property values of all the other houses on her block: c. Market demand curves are too far to the left (too low): d. Underallocation of resources: e. Water pollution from a factory forces neighbors to buy water purifiers:
In the Last Word, the concept of pork-barrel politics is illustrated by
1. In the Last Word, the concept of pork-barrel politics is illustrated by a. the purchasing of unsolicited military equipment. b. small appropriations bills that benefit a small group. c. buying equipment from many firms to benefit many congressional districts. d. building projects that have an unknown cost. 2. Logrolling occurs when a. one group of legislators ignores the needs of another group. b. legislators work together to keep the political agenda rolling. c. one group of legislators helps another with the understanding that at some point in the future they, in turn, will be helped. d. legislators work together to keep the legislative log rolling.