A Common Assumption That Economists Make About the Behavior of Electedofficials

question 45

Multiple Choice

A common assumption that economists make about the behavior of electedofficials is that they try to

• A)maximize the size of their government salaries
• B)maximize the size of their control over the budget process
• C)maximize the number of votes they receive in the next election
• D)minimize the government's expenditures in order to balance the budget
• E)conform to the wishes of special interest groups so that the government behaves as a single, consistent
• Decision maker

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Definitions:

Futures Contracts

Agreements, enforceable by law, to acquire or dispose of certain commodities or financial assets at a price agreed upon now, to be transacted at a later date.

Hedge Cost Risk

Hedge cost risk refers to the potential variability in the expense of hedging strategies, which are used to mitigate financial risks associated with currency, interest rates, or commodities.

Bushels

A unit of volume that is used primarily in the United States to measure quantities of agricultural commodities and dry goods.

Cereal Company

A business entity that manufactures, markets, and sells cereal products, which are typically grain-based foods consumed for breakfast.