Ch 5 Quiz

The theory that special interest groups will dominate policymaking because of the free rider problem is known as:

Distributional coalition theory.

Countries with larger governments tend to be poorer.

False

In Locke's social contract, individuals must act to solve the problems that government cannot solve.

False

Monetary policy uses the public purse to stabilize private spending, so government spends more in a recession and less during booms.

False

Public failure occurs when the government fails to act to prevent a market failure.

False

Which of these has the most government spending, relative to GDP?

France

Arrow's impossibility theorem proves that:

No possible method of making social choices can be reliably consistent, fair, and decisive.

A system of governance in which the head of the legislature is the head of government, while the head of state is either an elected president or hereditary monarch with limited powers, is called:

The Westminster model.

Countries with more honest governments tend to be richer.

True

When markets are efficient, taxes create a deadweight loss that offset the benefit of providing public goods.

True