ECO

Suppose the outstanding balance on Christi's credit card is $2,000 and her annual interest rate is 18 percent (1.5 percent per month). If Christi makes a payment of $50 this month, her outstanding balance will decline by approximately

$20

Which of the following is/are necessary if a nation is going to consistently undertake investments that create wealth? ​ I. Government subsidies and tax breaks for investments that policy makers believe will be productive II. A legal system that protects persons and property III. Federal funding of investments approved by a majority of elected representatives

2 only

Which of the following is an example of a government agency introducing competition to its operations in order to lower costs and improve efficiency? A government office extends business hours during the workweek. A government agency lobbies for additional funding for next year's budget. A government agency out-sources its vehicle maintenance department to the lowest bidder. A government office printing department comes in under-budget for the year.

A government agency out-sources its vehicle maintenance department to the lowest bidder.

When it comes to spending, members of Congress have a strong incentive to A. both fight for expenditures benefiting their constituents, and oppose spending benefiting others. B. fight for expenditures benefiting their constituents, but only a weak incentive to oppose spending benefiting others. C. fight to keep spending in line with expected tax revenues in order to achieve a balanced budget. D. oppose all spending, including expenditures benefiting their constituents.

B. fight for expenditures benefiting their constituents, but only a weak incentive to oppose spending benefiting others.

Becoming a monopoly is attractive to a firm because A. it allows the firm to produce more goods at lower prices without worrying about competition. B. it allows the firm to produce less output and charge a higher price, increasing its profit. C. it encourages new firms to enter the industry. D. it encourages government scrutiny and oversight.

B. it allows the firm to produce less output and charge a higher price, increasing its profit.

As a general rule, if pollution costs are external, firms will produce A. too little of the good generating the pollution. B. too much of the good generating the pollution. C. an optimal amount of the good generating the pollution. D. cannot be determined without additional information.

B. too much of the good generating the pollution.

Which of the following correctly describes the external benefit resulting from an individual's purchase of a winter flu shot? A. The flu shot is cheaper than the cost of treatment when you get the flu. B. The income of doctors increases when you get the flu shot. C. The flu shot reduces the likelihood others will catch the flu. D. The flu shot reduces the likelihood you will miss work as the result of sickness; therefore, you will earn more income.

C. The flu shot reduces the likelihood others will catch the flu.

As government becomes more involved in providing favors to some businesses and sectors of the economy at the expense of others A. political corruption will decline. B. economic efficiency will improve and growth of per capita income accelerate. C. lobbying and other rent-seeking activities will increase.

C. lobbying and other rent-seeking activities will increase.

Budget deficits, money creation, and indirect taxes are often a result of A. the attempt to match the costs of government programs with the beneficiaries of those programs. B. the desire to pay for various government programs directly instead of shifting the visibility of the costs into the future. C. the political attractiveness of concealing the true cost of government programs. D. the incentive of politicians to disclose fully the true cost of government programs.

C. the political attractiveness of concealing the true cost of government programs.

Which of the following explains why democratic decision-making often leads to the adoption of counterproductive projects? A. the special-interest effect B. the rational ignorance effect C. logrolling D. all of the above

D. all of the above

Three Credit Bureaus

Equifax, Experian, TransUnion

T/F Without cost, you can request as many copies as you want of your credit report per year from each credit bureau.

False

Which of the following is true? An unused balance on your credit card is like money in the bank. Interest rates charged by credit card companies are generally high because the loans are unsecured. An outstanding credit card balance is an asset that adds to your personal wealth. The power of compound interest benefits those with outstanding credit card balances.

Interest rates charged by credit card companies are generally high because the loans are unsecured.

Governments encourage lobbying and favor seeking when they protect property rights and enforce contracts in an evenhanded manner. are heavily involved in the granting of subsidies and tax breaks that favor some segments of the population at the expense of others. impose user charges that force individuals and businesses benefiting from government services to also pay the cost of the services. provide government employees with compensation similar to what they could earn in the private sector.

are heavily involved in the granting of subsidies and tax breaks that favor some segments of the population at the expense of others.

In recent years, americans tended to move

away from high tax states to those with lower taxes

When the share of resources allocated by political decision-making becomes larger and larger, the self-interests of voters, politicians, and bureaucrats will be closely aligned with economic progress. the government will generally focus on the protection of individual rights, promoting free trade, and providing national defense. individuals will get to keep more of what they earn and the economy will grow rapidly. individuals will spend more time organizing and fighting over slices of the economic pie, instead of expanding the size of the pie.

individuals will spend more time organizing and fighting over slices of the economic pie, instead of expanding the size of the pie.

Credit cards make it easy for people to run up sizeable debt. make it easy for people to borrow funds at a low rate of interest. are just like money because funds can be used to purchase things up to the credit limit. can help you get more from your money because they make it possible for you to spend more than you earn.

make it easy for people to run up sizeable debt.