Suppose That a Special Interest Group Makes Up 10% of the Overall

question 230

Multiple Choice

Suppose that a special interest group makes up 10% of the overall population. If a new proposal stands to generate $2 million in additional benefits to the group, the group will:

• A) always support this proposal since the costs are diffused over the entire population.
• B) never support this proposal if the costs are greater than $2 million.
• C) only support this proposal if the costs are less than $2 million.
• D) only support this proposal if the costs are less than $200,000.

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Definitions:

GDP

A synonym for Gross Domestic Product, it is the monetary measure of all final goods and services produced within a country's borders in a specific time period.

Money Supply

The complete accumulation of assets measured in money terms within an economy at any specified moment, including coins, cash, and the deposits across checking and savings accounts.

Interest Rate

The cost of borrowing money, expressed as a percentage of the total amount loaned, or the profit earned on savings and investments.

Money Market Equilibrium

The state where the supply of and the demand for money balances, resulting in economic stability at a given interest rate.