econ test 3
Which would be most likely to reduce budget deficits and special interest federal spending?
3/4 approval of both houses to increase spending or borrowing
Which of the following is true of central planning?
ALL OF THE ABOVE BITCH
Transfers and subsidies currently account for
approximately 50 percent of the federal budget
Budget deficits, money creation, and indirect taxes are often a result of
attractiveness of concealing true cost of government programs
According to Lippmann, history teaches that when there are no limitations on the power of government the
become oppressive, reactionary, and corrupt
When a tax is levies on business income or activities
businesses pass tax to customers, employees, and stockholders
As the tax rate imposed on a good or service increases,
buyer pays more and seller gets less when good/service is bought
When government officials use taxes, subsidies, mandates and regulations to manage economy, it is called
central planning
Which will improve efficiency of government and help protect individuals from exploitation by government
competition among decentralized government units
Taxes for the financing of government projects involve coercion because
dissenting minorities pay for project even if they oppose it
Which of the following will substantially increase likelihood a person will experience poverty?
dropping out of high school and having child as unmarried teen
Which of the following are most likely secondary effects of government without limits/constraints?
high tax, excessive constraints on trade and exchange, budget deficits
Which of the following is most likely to undermine long term growth?
high taxes, excessive regulation, and persistent inflation
Which of the following is most likely to undermine long-run growth?
high taxes, excessive regulation, and persistent inflation
As personal income tax rates are increased
incentive to engage in tax-avoidance activity increases
When the share of resources allocated by political decision-making becomes larger and larger,
individuals will spend more time fighting over slices of economic pie
Government promotes economic progress when
it is limited to the protective and productive functions
If the Federal Reserve is going to create economic growth and prosperity, it should focus on
keeping inflation low and general price level relatively stable
Agricultural subsidies and other special interest spending programs generally benefit
large operations, whose owners have incomes above national average
The distinctive feature of the American political process and the key to economic progress is
limited and decentralized government
When legislators trade vote on one issue for votes of other legislators on another issue, this is
logrolling
When legislators fight for expenditures that benefit cnsttnts at expense of voters in other districts,
logrolling effect leads to spending on counterproductive projects
Which of the following the best example of a public good?
national defense
When central planning replaces market forces, the political process favors which type of firm?
older and more politically-influential firms
When government is performing the protective function well,
people have confidence that their wealth won't be taken
Prior to 1960, what was the prevailing attitude toward federal budgets?
people thought that federal budgets should be in balance
Once the criterion for receipt of an income transfer is established,
people will modify their behavior to qualify for the transfer
When businesses and individuals use political process to take wealth o others, this is known as
plunder
The protective function of government seeks the harmonious interaction of its citizens through
protection of people and property against others
when goods are produced through government enterprises, their opportunity cost is
reduction in private output that could use same resources
Which of the following strategies is most likely to restrain excessive spending by federal government?
rule requiring 3/4 approval of both houses for spending proposals
Keynesian economists hold the view that government should
run deficits during expansion and surpluses during recession
Special-interest issues are politically attractive because
special interest groups feel strongly about issue, others uninformed
When managing budgets, a government agency will have the incentive to
spend all its allotted budget to make case for larger budget next year
When firm or enterprise obtains more funds from government and less from consumers, the enterprise will
spend more time trying to influence polls than meeting the needs of consumers
Which is a expected result of government subsidized insurance for people who live in high risk, flood zones?
subsidy will reduce cost/living in area so damage from flooding.
As taxes are increased to finance a higher level of income transfers
support for income transfers among recipients will increase
Which of the following explains why representatives will find borrowing a good way of financing government programs?
the shortsightedness effect
Which of the following is the best indication that a project is economically productive?
the total benefits exceed total costs
Article I, Section 8 of the US Constitution calls for Congress to levy taxes
uniformly and for programs that promote common defense and general welfare
