According to the median voter theorem, politicians will converge upon a spending bill of: Which of the following theories works to explain which voters will get their way in a democratic election? Elhanan Helpman (1984), ‘A Simple Theory of International Trade with Multinational Corporations’, Journal of Political Economy, 92 (3), June, 451–71 102 8. Voter decisions seem to depend greatly on: economic conditions in the year of an election. Which statement provides an explanation for tariffs decreasing market efficiency? the economy is hit by a shock to aggregate demand. Which of the following statements is TRUE?I. Voter 1 supports government spending of $20. Voter 3 supports government spending of $70. She also sells 100 shares of Company Y and makes a profit of $1,200. Rational ignorance is bad because it leads to uninformed voters making decisions. Refer to the figure. Which of the following would NOT prevent purchasing power parity from holding? Which of the following concepts best illustrates this scenario? Because of the multiplier effect, if a shock causes aggregate demand to increase by $200 million, then the government should _____ in order to restore the economy back to its original growth rate. A decrease in consumption growth will cause aggregate demand to: The crowding out effect of fiscal policy refers to: the decrease in private spending as a result of higher government spending. The theoretical result that there are welfare gains from trade is a central tenet of international economics. Which of the following four items is the biggest expenditure in the federal government's budget? What are the four major limits to fiscal policy? If there are only two candidates, A and B, and an open market for kidney trading is the only issue being debated in this election, which candidate will win the election? _____ is federal government policy on taxes, spending, and borrowing that is designed to influence business fluctuations. If official reserves are zero, a current account deficit of $1 million will cause a: What would cause a shift of the demand curve from D1 to D2 in the figure? Which of the following is NOT a function of the International Monetary Fund? Policy A is likely to be supported by politicians even though it makes society worse off. It should be noted that inventor of indifference curves, Y. F. Edgeworth applied them to explain exchange […] The public is usually better informed about policies in nondemocracies. When trade commences, consumers enjoy a higher level of satisfaction, partly because of improvement in terms of trade and partly on account of greater specialisation in the use of economic resources of the country. If there is inflation in the country, then PPP predicts: no significant long run change in the real exchange rate. If you are a married man, you can expect: more in Social Security benefits than a single man. Rising real GDP per capita has been an important force in reducing child labor. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy? Figure 1:The Production Possibilities Curve If there is no trade, t 8 h efa rm c o s this production and consumption. The Smoot-Hawley Act introduced the highest tariffs set by the United States in the last 80 years. What kind of rising costs will mostly cause U.S. government spending to skyrocket in the future? In a recession, automatic stabilizers cause: a decrease in tax revenues and an increase in government spending. The marginal tax rate for a person earning $30,000 is: Which of the following is NOT one of four programs that make up nearly two-thirds of the federal budget in the U.S.? What happened to these children? Germany can produce one watch for every 100 pounds of cheese it produces. Refer to the figure. Suppose a government is facing accusations of allowing domestic jobs to be lost to foreign labor in other countries. 18.1 Maximizing the Net Benefits of Pollution; 18.2 Alternatives in Pollution Control; 18.3 Review and Practice; Chapter 19: Inequality, Poverty, and Discrimination. when the median voter changes his or her preferences. * If land endowment rises, then production of good that uses land intensively (food) increases by more and An increase in the demand for a country's exports will cause the demand for its currency to: Which of the following transactions can be classified as foreign direct investment for the United States? Which of the following is TRUE about cross-country evidence on the relationship between economic freedom, standard of living, and democracy? If the federal government spends 12% of GDP and collects revenues of 10% of GDP, what is the deficit as a percentage of GDP? "Other investment" takes place in the United States when foreigners: shift bank deposits into the United States from other countries. Advantages of International Trade . David Rosnick is an economist at the Center for Economic and Policy Research, in Washington D.C. Gains from Trade? We exploit this data to assess how offshoring impacts domestic firm-level aggregate employment, output, wages and productivity. Start studying ECON 202. A decrease in consumption growth will cause: Fiscal policy is a good option to stimulate an economy when: The case when an increase in government spending isn't large enough to significantly increase aggregate demand is called: If an increase in government spending of $100 million causes an increase in aggregate spending of less than $100 million, we call this phenomenon: Government spending is BEST for the economy when it is worth incurring some: long-run costs to get a short-run economic boost. Which of the following conditions best predicts when the incumbent party will NOT win the presidential election? Assuming there is no crowding out, fiscal policy that shifts aggregate demand from AD0 to AD2 will move the economy to point: The time between which an economic shock is recognized and when the government passes a plan to carry out a policy response is called the: Expansionary fiscal policy can reduce real growth if the increase in government spending: causes a large enough decrease in private spending. So they're gonna give up 15 pants. T 3. A decrease in consumption growth will cause inflation to fall in: The time necessary for government bureaucracies to carry out a fiscal policy plan is called the: Refer to the figure. First introduced by David Ricardo in 1817, comparative advantage exists when a country has a ‘margin of superiority’ in the supply of a good or service i.e. A relatively loose commitment to a floating exchange rate produces a: All current account transactions take place in: A country is running a _____ when the inflow of foreign capital is greater than the outflow of domestic capital to other nations. Of the following, which is the smallest part of the United States budget? Sami Kurdi. ECON 433 Energy Markets and Policy. the market price). When the U.S. government sells bonds, bond prices: decrease and bond interest rates increase. British financial investments in the United States pay higher dividends. An increase in government spending causes: the aggregate demand curve to shift to the right. 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