Assume That Matt, Joe, and Teresa Are the Only Citizens

question 240

Multiple Choice

Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed public good has a total cost of $1,000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good
Is $500 for Matt, $280 for Joe, and $260 for Teresa. In a majority vote, this proposal will most likely be

• A) accepted, two in favor and one against.
• B) defeated, two against and one in favor.
• C) accepted, three in favor and none against.
• D) defeated, none in favor and three against.

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Definitions:

Money Supply

The complete sum of money available within an economy at a designated time frame.

Federal Reserve Bank of New York

One of the 12 Federal Reserve Banks in the United States, playing a key role in monetary policy, financial supervision, and economic research.

Board of Governors

The executive leadership of a central banking system, such as the Federal Reserve in the United States, responsible for setting monetary policies and overseeing affiliate banks.

Reserve Requirement Ratio

The fraction of deposits that banks are required to keep on hand, either in cash or as deposits at a central bank, as a measure to ensure bank liquidity.