Under Democratic Representative Government, Spending on a Government Program Will

question 44

Multiple Choice

Under democratic representative government, spending on a government program will likely be larger than the amount consistent with economic efficiency when

• A) tax costs are levied in direct proportion with the benefits received.
• B) both the costs and benefits are widespread among the voters.
• C) benefits of the program are highly concentrated, while the costs are widely dispersed among voters.
• D) costs of the program are highly concentrated, while the benefits are widely dispersed among voters.

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Definitions:

Interest Rates

Represents the charge or payment for the use of money, often expressed as an annual percentage of the loan or investment amount.

Stock Market Boom

A period of significant and rapid increases in the value of shares traded on stock exchanges, often reflecting optimism about the economy.

Aggregate Demand

Total inquiry for all types of goods and services in an economic framework, established at a given price level within a set time limit.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, banking supervision, and financial stability.